Real World, Battle Tested Solutions To Health Care With Marshall Allen

RTB Marshall Allen | Health Care Solutions

In this episode of Raising The Bar Podcast, Allison talks with Marshall Allen. He is a Healthcare Reporter, Founder, and CEO of Allen Health Academy and the author of NEVER PAY THE FIRST BILL.


Marshall Allen was a reporter at ProPublica investigating the cost and quality of our health care. He is one of the creators of ProPublica’s Surgeon Scorecard, which published the complication rates for about 17,000 surgeons who perform eight common elective procedures. Allen’s work has been honored with several journalism awards, including the Harvard Kennedy School’s 2011 Goldsmith Prize for Investigative Reporting and coming in as a finalist for the Pulitzer Prize for local reporting for work at the Las Vegas Sun, where he worked before coming to ProPublica in 2011. Before he was in journalism, Allen spent five years in full-time ministry, including three years in Nairobi, Kenya. He has a master’s degree in Theology.


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Conversation Highlights:

[00:01:41] Who is Marshall Allen?

  • How did Marshall become a healthcare reporter?
  • Why did Marshal choose ‘Never Pay the First Bill’as his book’s title?
  • People do not care much about health and money.


[00:06:53] Why are employers the sleeping giants of healthcare reform?

  • Health insurance is an employee’s compensation.


[00:12:57] What are the game-changing things for employees?

  • Employees and employers need to team together to navigate pitfalls.


[00:16:49] Who is Marilyn Bartlett?

  • What is reference-based pricing?
  • How can you collect fair and accurate prices for your bill?


[00:26:35] Patients are not the actual customers.

  • What are different penalties for employers if they don’t provide the necessary information?


[00:33:06] The Highest-paid COVID test!

  • Frauds are common these days.


[00:40:00] David William’s case…


[00:42:28] Q&A session with Marshall

  • Marshall’s appeal to the employers
  • The big problem is the business side of industries.


[00:48:46] What is Direct Patient Care?


[00:50:29] Open questions with Marshall…

  • Takeaway for Advisors and Brokers


[01:00:32] Allen Health Academy


Memorable Quotes:

“Employers are the sleeping giant of healthcare reform.”

“Insurance companies are not guardians for our healthcare dollars; we have to protect our money.”


Special Reminder:

Thanks for checking out the show. Be sure to subscribe and leave a review.

If you have an idea or topic for the show, or maybe you want to be on the showvisit us at https://raisingthebar.live.


Reach out to Marshall Allen:

LinkedIn: https://www.linkedin.com/in/marshallallen

Twitter: https://twitter.com/marshall_allen

ProPublica: https://www.propublica.org/people/marshall-allen

Website: https://www.marshallallen.com/                         

Book: Never Pay the First Bill by Marshall Allen


Connect with Allison:

YouTube: Altiqe

LinkedIn: Allison De Paoli

Website: https://altiqe.com

Please email her at clientcare@altiqe.com


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Real World, Battle Tested Solutions To Health Care With Marshall Allen

Welcome. In this episode, we are going to have a great conversation with Marshall. You’re going to learn a whole lot about Marshall, what he does, why he has insurance groupies and about a few other people that you need to know about. You’ll get a lot of value from the book. If you are an employer here, you will learn a whole host of things. I hope that you are as appalled as we in this industry are appalled. We are going to get started.

Marshall, thank you so much for doing this with me. I want to take a minute to let people know who you are. Most people know that you were an author or writer for ProPublica. You also have a 2011 Harvard Kennedy School Goldsmith Prize for Investigative Reporting. You are a twice-nominated Pulitzer Prize writer with ProPublica and the bestselling author of a book that has taken off even beyond your wildest dreams, Never Pay the First Bill. Thank you for coming. Tell us how you ended up reporting about healthcare.

Thank you, Allison, for inviting me and for putting this together. I appreciate everybody joining us. I know you’re busy so I appreciate you being here. I’m excited to talk to you all. I’m an accidental healthcare reporter. I never intended to cover healthcare. When I started at the Las Vegas Sun, I had been a journalist for five years. The Sun is a small family-owned newspaper in Las Vegas. My editor takes me out to lunch one day and says, “We want you to cover healthcare.” My first words were, “I can’t imagine anything more boring than covering healthcare.”

I was wrong. I was ignorant about the industry but what I do well is I listen to people and then I can take advice and see an opportunity. I told my editor, “I know nothing about healthcare but let me give it a try.” As soon as I started my very first stories, I could see right away that this topic is so important to readers because you’re dealing with people’s health, first of all, and their money. There’s not much that people care more about than their health and their money. That was in 2006.

Every story I’ve done ever since then has been focused on the individual patient and how they navigate through the healthcare system. They’ve been mostly investigative in nature because if you’re going to look at this system from the point of view of the patient, inevitably you’re going to be running in opposition against a lot of the big healthcare power players who frankly are taking advantage of patients and taking advantage of them financially.

I’ve also done tons of stories about patient safety and quality of care issues. I’ve spent years investigating those issues. I started looking at it through the lens of the patients who navigate the system. I found injustice after injustice that was astonishing sometimes in their absurdity. It’s how crazy the overbilling can be, how sloppy the billing can be and how much overtreatment takes place. It’s a target-rich environment for an investigative reporter. I took all of this knowledge and what led to the book is I would get all these phone calls and emails.

You start doing these stories and then patients start to find you. They start emailing you because they’re so desperate for help. I had gotten so many phone calls and emails. I had done so many in-depth stories where I looked at people’s records and medical bills. I ran all this stuff by experts. I learned how this crazy system works. You can feed a person a fish or you can teach them to fish. There aren’t enough journalists in America to do all these stories. I wanted to empower and equip individual patients to fight the system and win.

My book has a subtitle. It’s called Never Pay the First Bill: And Other Ways to Fight the Health Care System and Win. The And Winning is the most important part. There are 8 chapters in the book for employees and there are 3 chapters for employers. Allison, you know this but one of the astonishing things that I learned as I was doing these investigative stories specifically about health insurance and the way we pay for employer-sponsored health benefits is that the costs don’t have to be this high.

RTB Marshall Allen | Health Care Solutions
Never Pay the First Bill: And Other Ways to Fight the Health Care System and Win

There are employers who are working with advisors like yourself who are navigating the system in a different way. It might not be the same black box kind of health insurance product that’s put out by one of the big insurance plans but they are better benefits at a lower price. That’s something I emphasize in the employer section of the book. The book is focused on working Americans. I’m showing people how they and their employers can save a lot of money while delivering better benefits.

I love that you say that employers are the sleeping giants of healthcare reform. Tell me why you said that.

No one’s ever tried to engage the employers and the employees so that they could start to assert themselves. We’ve always wished that our policymakers would come up with a solution that’ll fix this problem for us or we’ve trusted the healthcare industry when they talk about value-based payment or, “We’re going to look at this or that issue,” as if it’s going to lower healthcare costs.

The industry has no incentive to take less money from us. Politicians have had decades on both sides of the aisle. I’m not being political here. I’m just saying that we can look at over 20 or 30 years and see ongoing ridiculous increases in prices. They’re unjustified. We need to stop looking for someone else to solve this problem. The employers and the employees have not even been engaged yet. They’re just starting. You’re seeing some early adopters. You tell me. How many employers would you say are being assertive with their benefits design in a way that’s improving the care while saving money?

I am incredibly fortunate to have some employers who have said, “Hold up. We’re going to fix this. 1) We can’t pay for this. 2) This is not working for our people.” They run at different speeds. Some are a little further along than others and the cultures are all different. That is an important piece that we don’t talk about a lot. Different cultures have different needs and they need to have different conversations.

Do you mean the culture of the companies?

Yeah. That’s important. I have a client. We put in a reference-based pricing plan, which some of you may know or not and that is not for everybody. For some employers, it’s great but it does have its hiccups. We had an issue where an employee had some balance bills and they were about $8,500, which in the grand scheme of things is not that much. If you make $40,000 or $45,000 a year, that will bankrupt you. I went to the employer and said, “This is what we’ve got. This is what we’re going to do about it. We’ll wipe out some of this. I’m not sure we’re going to get rid of 100% of this. I’m going to come back to you if there’s anything left and I want you to write a check.”

He looked at me and went, “Not employers are like that. Not all employers have the means to do that.” There are other employers whom you say reference-based pricing and say, “We can’t do that.” They may not be able to and that’s okay. You need a more nuanced conversation. A number of my mastermind partners and I are on the call. We don’t set it in and forget it. We work all year to make sure that things happen. I got to tell you it’s fun, helpful and useful to people.

It’s also satisfying. I say in my book, when you talk to the employers who have made this change, they’re evangelistic about it. It’s great to talk to these folks because they’ve realized, “All these years, I was doing things their traditional way.” The system is set up for you to do things the traditional way so they can keep taking more of your money than they deserve to be taking. You do have to swim upstream against the incentives or the way that the system is trying to push you. When I say sleeping giant, a lot of employers are asleep. I asked a lot of advisors when I wrote the book. I said, “How hard should I be on employers in this book?” A lot of it I’m looking at from the perspective of employees.

I’m looking at these rising costs. The deductibles are going so high. There was a study that came out in The Journal of the American Medical Association that said that 1 in 5 Americans has medical debt in collections. The overall burden for all these Americans with medical debt in collections is about $140 billion that they’re holding. This is crushing the working Americans. When I talked to advisors about this, they said, “You should be hard.” You want to be hard on the employers. However, the employers are also victims here. They’re funding these higher costs. The secret thing that hasn’t happened yet is they haven’t equipped their employees to navigate the pitfalls of the system.

The Journal of the American Medical Association said that 1 in 5 Americans has medical debt in collections. The overall burden for all these Americans with medical debt in collections is about $140 billion. This is crushing working Americans. Share on X

That’s what I try and do with my book. They also need to have courage. It takes courage on their part to try something different. It feels very risky to them. Even with these reference-based pricing plans, you might get hit with some balanced bills but overall, your costs are so much lower, to begin with, that you can afford to pay a few balanced bills here and there. I’m trying to persuade. In my book, I was pretty fair to the employers. I didn’t beat them up or anything like that but I am trying to persuade them to try. “Please have the courage to do this,” and employees too, “Have the courage because the employees need to change their mindset as well.”

One of the most important things that you said in the book, among many important things, is that health insurance is employee compensation. Many people look at the frame like, “That’s part of my compensation so I’m going to use it,” not realizing that when it’s abused and there’s over-delivery of care and overspending and all the fraudulent things that happen, those dollars, your salary increase is going to fund that. It’s not coming to an employee’s pocket.

That’s one of the game-changing things that an employee understands. It’s the first chapter of the book. I have what I call the five hidden reasons why we have to fight back. Reason number one is what you’re hitting on. We need to stop saying someone else pays for healthcare, even in an employer-sponsored plan. Let’s say I’m an employee and I’ve met my deductible. In my mind, I’m like, “The health plan is paying for everything. It doesn’t matter what price I pay or whether I need the care or not.”

You might have some co-insurance or a co-payment but it’s a free for all if you’ve met your deductible. Nobody is saying you shouldn’t get the care that you need. What employees don’t understand is that your compensation includes your wages, health benefits, retirement benefits and paid time off. This makes up your benefits package and it’s funded by your employer. We’re thankful that employers are funding all this money for our healthcare benefits but it’s part of the employee’s compensation package.

What I’m trying to help employees see is all this money that’s in this pool of your compensation for you and your colleagues, if it gets wasted on overpriced, unnecessary healthcare, you know how that can get racked up by the thousands of dollars. I talked to a guy, Kevin Vincent, in Amarillo, Texas. He needed two MRIs. He got quotes for him because he had a high deductible health plan, a $10,000 deductible. He got referred to a hospital imaging center.

Anybody who’s in the industry knows that hospitals are the most expensive places to get an MRI or a CT scan. Most employees don’t know that. You wouldn’t know that. You go to the place you’re referred to. He got referred to the hospital. The initial price was $11,000 if he ran it through his insurance and $9,000 if he paid cash. He ended up getting referred through a company called Green Imaging to an independent MRI center, which was about 1/2 mile away from the hospital. He paid $900 for those 2 MRIs. He saved more than $8,000. Your health plan saves $8,000. In his case, he paid cash. He saved it himself. Let’s say, he would’ve met his deductible. He might’ve been like, “I don’t care if it costs $11,000. I met my deductible.”

You got to realize you gave an $8,000 bonus to that hospital MRI center and you took that money out of your precious money that’s devoted to your compensation. The next year when your employer goes to give you a raise, they’re going to be like, “We wish we had $8,000 extra to give people like Kevin a raise but it’s all been spent. It’s all been given to the healthcare system.” Employees and employers need to team up together to navigate these pitfalls, take them on together and then overcome them, which is possible to do.

I have a client that gave me the best compliment I’ve ever had and didn’t give me any warning. I was about to pass out. He was introducing me to somebody. He said, “She’s helped us. For the first time in I don’t know how many years, we’ve been able to give a merit increase and not take it back and people noticed.” Generally, merit increases are not huge but you kept it. It was your money and you kept it. Those are the things that employers who contain their healthcare costs can do lots of other things as well. Let’s talk about Marilyn Bartlett. I am a ridiculous fan girl of hers.

To put up with being swarmed by insurance agents wherever she is, you devote quite a section of your book to her. For those of you that don’t know who she is, she ran the state of Montana Health Plan, watched it almost go over a cliff and brought it back at age 67. She might be 92 pounds soaking wet. She is the nicest, kindest woman you have ever encountered unless you mess with her health plan.

She is a tough cookie. When I wrote about Marilyn, in each chapter of my book, I tried and highlighted what I called these guides. The people who have navigated the system and they’ve fought back and won and then they’ve developed tactics that the rest of us can follow. The chapter I do about Marilyn Bartlett is a blueprint for what other employers can do. It shows by telling her story what other employers could also do and the types of questions that they need to ask. When Marilyn took over the health plan, it was failing and predicted to be insolvent within a couple of years. That created the environment.

With the environment a lot of us are in, there’s a certain amount of desperation and that creates a willingness to try something different or more provocative. Marilyn, when she got hired, she gave me the PowerPoint that she delivered. She gave this presentation where she said, “Here’s what I think we should do. We’re going to analyze our spending compared to Medicare as a benchmark,” which I recommend in my book that people do. You can get Medicare prices at different hospitals and doctors. That’s public information. You can compare what you’re paying to the Medicare price.

Montana is a small state. There are thirteen big hospitals in the state. They were charging her anywhere from say, 200% of Medicare up to sometimes 800% of Medicare, depending on the service and the hospital. She realized, “I needed to get these hospitals down into a range that I can afford. I’m going to set the price.” That’s what you’re doing with these reference-based pricing plans. Reference-based pricing is on the spectrum of a much more aggressive approach to take.

I said the buyer sets the price. That’s the argument here. We are the buyer and we’re going to set the price. I don’t remember the percentage of Medicare she set it at but it was a generous percentage of Medicare, 180% of Medicare or 200% of Medicare. I don’t remember the specifics but it’s something like that. It’s not like less than Medicare or we’re going to pay you the Medicare rate. They’re taking the Medicare rate.

RTB Marshall Allen | Health Care Solutions
Health Care Solutions: We are the buyers, and we’re going to set the price.


She had to go to all the hospitals because she had employees all over the state. She had to negotiate with them. There’s a spectrum of price variation. Some of the lower-priced hospitals got a raise under her reference-based pricing plan. The higher-priced hospitals had to take a pay cut. What we need to realize with that price variation, even if we don’t put in a reference-based pricing plan, we don’t get more for our money in most cases in healthcare by paying more.

It’s not like buying a luxury automobile or a mansion in a beautiful neighborhood where if you pay $100,000, you’re going to get something much better for a knee replacement than if you pay $20,000. For Marilyn, when she looked at her claims data, some of these places were charging and expecting $100,000 for a knee replacement. Others were $20,000.

I have a client that had done this at the same time and we negotiated that down to $21,000 without any argument.

That’s incredible. I wouldn’t know but I bet they’re getting 5 times that in some cases for 2 knee replacements. The variation is so huge. If you know the variation is high, what we need to start doing is saying, “I prefer to have the lower price, please. I don’t want to pay five times more than someone else is paying for the same thing.” In the book, I try and show this price variation exists everywhere, whether it’s drugs, imaging tests, lab tests or any type of procedure. The price variation is huge. We have to identify quality providers that deliver value for us at a reasonable price and then shun the ones who are overpricing and price-gouging us.

There is real data that you can access. Nobody makes it easy to access but it is accessible that will tell you who a high-quality provider is with evidence-based medicine standards. That is the most important piece. When you follow that, low cost is a natural byproduct and it may not be the lowest cost. I don’t think we need to have the lowest cost but a fair price.

It doesn’t have to be. You want to make sure it’s fair. That’s even the title of my book, Never Pay the First Bill. I’m not saying never pay your bills but the principle is never pay the first bill until you have verified that it’s both accurate and fairly priced. You do that by getting an itemized medical bill. Every employee, when they get a hospital bill, should call them up and say, “You didn’t itemize this for me. You need to give me a list of all the charges.” It’s like anytime we go out to a restaurant or go to the grocery store. We need to have it itemized so we can make sure it’s accurate. If you get the billing codes, you can look up those codes and see if those prices are fair.

You can check on hospital websites because the Federal government requires hospitals to post their prices. Another place you can get a good estimate is FairHealthConsumer.org. That’s a website anybody can go to. You can put some in the description. Let’s say it’s a colonoscopy. It’s all in the book. People can price it and then they can see if it’s fair. If it’s fair and accurate, then pay the bill. If it’s not, then that’s when you contest it. Marilyn also looked at her PBM or Pharmacy Benefit Manager. The two biggest buckets where she found savings were with the hospital pricing, where she got them to agree to a reference-based model and then it was the pharmacy benefits. Drug prices have skyrocketed.

I’m always amazed by the schemes that these companies come up with to take our money. One of the most outrageous ones that are becoming uncovered more is this thing called spread pricing. It’s a little confusing but it’s simple where a pharmacy benefit manager, which is like the insurance company that manages the pharmacy benefits, gets the money from the drug manufacturer and fills the prescription at one price. Let’s say it’s $10 to fill a prescription. They tell the employer-sponsored health plan that it costs $20 or $50.

They quite simply take the $20 from the employer-sponsored health plan and pay the $10 to the pharmacy and they keep the spread. That’s the spread pricing. There have been more studies being done, these audits in different states, most of Medicaid plans, where they are finding the amount of money being lost to spread pricing in the state of Ohio that they did an audit a couple of years ago. It was more than $200 million lost to spread pricing for generic drugs alone in the Medicaid plan. This spread pricing is baked into all these employer-sponsored health plans.

If you’re an employer and you’re sponsoring benefits and not looking at your PBM contract, you got to start digging into that stuff. This is what Marilyn did. She read the fine print in these contracts. It’s been satisfying for me as the book comes out. I have a friend who’s in a position of leadership for his company. This friend of mine got ahold of the book and he’s started asking questions of his broker and insurance company about spread pricing. He told them, “I want to know how much money is being lost to spread pricing in my healthcare plan.” You can maybe guess what their answer was, Allison. What do you think their answer was?

“No. It’s none of your business.”

That’s exactly right. They told him, “We’re not required to tell you and we’re not going to tell you.” Hold on. The employer is the one paying for this and yet when you say, “I’m funding this. I want to know how much is being paid in spread pricing,” they say, “There is spread pricing but we’re not required to tell you and we’re not going to tell you.” What does that say? That’s crazy. I talk about in the book how in America, we say the customer is always right but you aren’t the actual customer. In healthcare, they don’t treat us as the actual customer. That’s a perfect example.

In America, we say the customer is always right. In healthcare, they don't treat us as the actual customer. Share on X

Patients are not the actual customer. The networks are not always hospital systems but facility systems. They are the customer of each other. That is where their interest lies. An employer is a secondary customer.

To tie a bundle or a bow on that, Marilyn switched to a PBM that did not use spread pricing. There are PBMs out there who don’t operate that way. She switched to one of those and saved millions of dollars a year. Marilyn turned this whole health plan around. Tell me about the ones that don’t do spread pricing.

There are about half a dozen that I’m aware of that don’t do spread pricing. I’m sure there are a few others that I don’t know. I don’t know everybody. They put in their contracts. You have to go back to the contract and you always have to go back to the contract. They will allow you to audit down to what the pharmacy has paid. They’ll let you look at the 835 files and they indicate that they will pass all third-party revenue back to you. I have a friend that has worked in the PB industry for a long time. When he does presentations, he says, “You want your rebates back? No problem. I got five other buckets.”

What do you mean?

Five other buckets where they shoosh money back and forth. You have to be able to audit down to what the pharmacy was paid or you do not know and you cannot calculate your rebates. You should be getting it right. You should not be getting a rebate credit.

That’s super interesting. I don’t even know about these five other buckets. That’ll be the next one but this stuff is beginning to be revealed. You’re hitting on another thing, Allison, that’s important that I say in one of my whole chapters for employers. If employers don’t have a benefits advisor that is asking these questions for them, many advisors are being funded by the PBMs and big health insurance companies, the traditional insurance broker arrangement.

They’re being influenced by the money that they’re taking from the industry while they do advising for employers. That’s a conflict of interest. At least you need all that income disclosed so that you know where it’s coming from. That’s what started with my friend who is in this position of responsibility with his organization. He started asking his broker, “What are all your sources of income?” That’s where the spread pricing thing came up. This is stuff that’s beginning to be untangled.

There were some pretty significant regulations and executive orders that came out in the fourth quarter, which is fairly typical of all administrations, requiring employers, not health plan carriers or brokers, to understand all the sources of revenue in and between their vendors. The penalties for not following that are pretty substantial. If you do not ask and receive this information, then you have committed an ERISA-prohibited transaction. There is a civil penalty and an excise tax. You have no idea how big that can be.

Like most things, governmental-related penalty letters are going to come 48, 24 and 36 months later. You’re going to be like, “I don’t know.” Don’t be that person. Know what is going on and ask. You are obligated to ask and all of your vendors are obligated to provide that information to you, how much they’re paid and what they do for that fee. I don’t want to demonize anybody here. There are plenty of hospital systems that offer fair prices for care and take good care of people. There’s no one demon here. There’s a system that is not built for patients.

That is an important thing to emphasize. As an investigative reporter, my tendency would be to highlight the bad actors. There are as many who are on the fair side. What we need to do as employers and employees is go to the ones that give us the fair price, the price upfront without the shenanigans and then reward them with our business. That’s why we have so much power. That’s a power that we haven’t yet utilized.

RTB Marshall Allen | Health Care Solutions
Health Care Solutions: What we need to do as employers and employees is go to the ones that give us a fair price and then reward them with our business. That’s a power that we haven’t yet utilized.


Employers and employees fund most of the healthcare system. We collectively are the biggest payers. We’re bigger than Medicare and Medicaid. There are 155 million Americans getting their employee benefits through their employer. There are another 30 million or so that are uninsured. We’re steering the business for about 185 million Americans. Imagine if we were to assert ourselves. That’s what I’m trying to call for people to do.

Let’s not be passive. Let’s get engaged. Let’s not be ignorant. Let’s be educated and empowered. Let’s not back off. Trust me. They’re going to squeal when we poke them. My friend poked his insurance company, PBM and broker. He said, “I want to know what’s going on with spread pricing.” They said, “We’re not going to tell you.” They’re not going to always roll over but then we need to say, “If you won’t tell me, I’m going to give my business to someone who will.” That’s not a trusting relationship. The thing is that we can win when we do this. That’s what I’m trying to encourage people to do.

Let's not be passive or ignorant. Let's get engaged, educated, and empowered. Share on X

I want to talk for a second about our wonderful COVID experience. This is a new thing. Nobody knows what’s going on. You have a very interesting story in your book about a doctor who got a COVID test, was about to pass out and decided he wasn’t going to take that. I have a similar situation in South Texas with an employer that had five people at a particular location go to the same urgent care facility for a COVID test. They went for their COVID test. Fortunately, nobody had COVID. They went back to work and everything was fine.

When they were doing their claim review, they saw these 5 charges for these 5 people that were all under $5,000. They were like, “What?” They dug into that a little bit more, COVID testing and all kinds of things that were not authorized by the patient and the patient was not aware of. They went so far as to call each of the patients and say, “Did you have all of these things?” Every one of them said, “I went for a COVID test.” I had a COVID test. It was $120. It’s not cheap but it’s not $5,000 and they did nothing. They had already paid the bill. They were like, “We’ll tell people not to go there to have a COVID test.”

Was this a fully insured plan or a self-funded plan?

This was an ASO carrier self-funded. They had already agreed. You don’t have to do that and you have Dr. Sussman, who did not do that and got mighty irritated.

I feel like the absurdities stack on top of the absurdities with a lot of the stories that journalists write. I may have documented with this one, the highest-paid COVID test. Dr. Zachary Sussman worked at one of these freestanding emergency rooms in Texas. He was in Austin. He was a contractor who set up their COVID antibody testing. He knew it only cost about $8 to run these antibody tests and he needed a test. He went into his facility and they asked for his insurance information. He gave it to them. He got the test. Everything went fine with the test. He gets his explanation of benefits. It was Golden Rule Insurance, which is owned by UnitedHealthcare. He had been charged $10,984 for the test.

Even more shocking, his insurance company had paid it at 100%. There was no discount. There was $10,984 paid by his insurance company for the COVID test. Dr. Sussman was so alarmed. He immediately resigned from his position to see his freestanding emergency room do what he said in his email to them appeared to be fraudulent. He said, “I cannot be participating in this business.” He quit immediately. He also called the insurance company.

He called the fraud department. They shrugged their shoulders. They were like, “Sometimes that kind of thing happens,” but it illustrates that the insurance companies are not the guardians of our healthcare dollars that we expect them to be. We have to protect our own money. Sussman ended up resigning. After my story came out, he contested. They eventually refunded the money. They did pay the money back but there was no evidence of wrongdoing. There was no further investigation that we know of.

This kind of thing happens all the time. I have a whole chapter in the book in the employer section on fraud. If employers are not bringing in a third-party company that can look at their claims and data and see if they might be having some suspicious billing and payment patterns, they need to do that because fraud is so common. Experts estimate it might be consuming 10% of all of our healthcare spending. That’s included in the commercial health plans.

RTB Marshall Allen | Health Care Solutions
Health Care Solutions: If employers are not bringing in a third-party company to look at their claims and data and see if they might be having some suspicious billing and payment patterns, they need to do that because fraud is so common. Experts estimate it might consume 10% of all of our healthcare spending.


If you look at Medicare and Medicaid, you see headlines all the time about doctors having to repay money and freestanding emergency rooms, hospitals, clinics or labs having to repay money to the government. You see people getting criminally convicted. That’s Medicare and Medicaid, where they have government investigators that police this stuff and hold people accountable. In commercial insurance plans, all they have is insurance companies.

They treat the doctors and hospitals like their customers, not someone they’re holding accountable. Even when they catch people, there can be blatant cases of fraud. This one you’re talking about sounds like some serious overtreatment and suspicion. Do not do anything about that. It enables it to go on and on. Employers are not paying attention either because they’re trusting the system. That’s the thing. They shouldn’t be trusting the system.

You have some numbers. You’ve tried to alert insurance companies to fraud on more than one occasion, I believe. The responses that you get are so interesting.

I called all the big insurance companies because I had done so many stories about fraud. I talked to more than a dozen fraud investigators who worked for those same insurance companies. All the investigators said, “We see fraud all the time. We catch it every day but we take it up to our higher-ups, the attorneys who work for UnitedHealthcare or others.” I spoke on the record to one of the counselors, the attorney for UnitedHealthcare. She said, “It’s too expensive to pursue the fraud.” UnitedHealthcare doesn’t want to pay to prosecute hospitals and doctors. They’re going to lawyer up. It’s going to be expensive. I challenged all of them. I said, “Would you please send me all the cases where your special investigations unit has led to repayment or a criminal conviction?”

It’s a public record. If it’s a criminal conviction or a civil lawsuit, that’s public information. There’s no privacy to protect. Can you guess how many cases they sent me where they had done that? Zero. That doesn’t mean it has never happened but wouldn’t they proudly put that forth? Wouldn’t they be like, “I’m so glad you asked because we’re putting out press releases every time we bust a doctor or a hospital for fraud?” It’s not happening. They’re managing our money and they’re letting it all flow right through. They’re not checking the claims and high prices. They’re just letting it go.

You have two specific examples of that. One was in New Jersey with the Teachers Health Plan but the other was in Texas with Southwest and UnitedHealthcare. That one was interesting to me and is indicative of how many tentacles fraud has in the commercial market. Would you tell us a little bit about that?

It’s also indicative of the loopholes in our payment system that are big enough that you could drive a semi-truck through. A guy in Fort Worth, Texas named David Williams was a personal trainer. He wasn’t a doctor. He had no medical training. He went to Medicare and applied for National Provider Identifier numbers. The NPI number is the thing you need as a doctor or a hospital to bill insurance companies and Medicare.

The big loophole here is that Medicare does not check to verify that someone’s a doctor before they give them an NPI number. Anybody could apply for an NPI number and get one within about twenty minutes online. David Williams got about 2 dozen of these NPI numbers and he started sending bills to United, Aetna, Cigna and all the big insurance companies over a span of 4 years.

He billed them about $25 million and got paid more than $4 million. After it reached absurd levels where they would catch him, they would tell him he needed to repay the money out of the same funds they were paying him, which they shouldn’t have been paying him any money anyway. They would catch him and say, “You need to repay us.” He would stop using that NPI number and start using another NPI number with the same name and address.

This guy wasn’t a criminal genius here. This was a guy who was brazen enough to go through the front door, start filing claims and get checks. It was that easy for them. Southwest Airlines was the biggest victim of that fraud. I want to say about $2 million of those dollars came from Southwest Airlines because their flight attendants were doing some of these workouts and then he was billing the workouts as if they were doctor visits.

We’re sending out copies of the books. “When working with employers in health insurance is not the primary topic of discussion, is the question about whether or not they’re aware of spread pricing a key question to open the door?” Probably not. Better questions are related to employee satisfaction and the intention of the health plan. Spread pricing is a detail that makes insurance people crazy but nobody else cares.

What I’m trying to appeal to employers is that they’ve had year after year. I don’t know but it must be very dissatisfying for an employer to keep raising the premiums and deductibles. They know that their workers can’t bear this cost. I’m trying to appeal to them to say, “You can equip and empower your employees. You can do things in a different way yourself if you’re willing to engage this issue in a little bit different way and reframe the way you look at it.” I don’t know if any of your employers would be interested. I want to do Zoom meetings with employees where we do an employee education session where I tell them, “Here are ten ways you can save big money on your healthcare.” I would love to do that with employers and employees.

It must be very dissatisfying for an employer to keep raising premiums and deductibles. They know that their workers can't bear this cost. Share on X

We have a list.

We can do that. I would love to do that if there are any advisors reading that want to do that too. To open the door to say, this is about employee protection, employee empowerment and employee retention. We can help our employees. My hope with the book too is that I know that a lot of employers are reticent to make changes because they’re going to get a lot of complaints from their employees.

Their employees are going to say, “What do you mean I can’t have my Blue Cross Health Plan or Aetna Health Plan?” If the employees understood how the system works and how some of these brand-name companies are not protecting their compensation, the employees might be more amenable to doing something differently. I’m hoping that we can start a little brushfire at the employee level and then it’ll get up to the CFOs, the CEOs and the HR department so that they’ll be empowered and emboldened to make some of these changes.

Mike Hill, who might be the smartest person around and also a broker of the year finalist so everybody knows, says that the best way to picture the healthcare system is the Apple TV ad from 1984. It is a broken system with robots going through the motion. No one inside the system asks why. That’s pretty accurate.

This David Williams case was such a rich case because he was eventually convicted. He’s in Federal prison. There was this amazing testimony by the special investigative unit leaders for Aetna, Cigna and United. On the record, they said, “We ought to adjudicate all of our claims.” If you fill in the right date, an actual NPI number and address of service and some basic stuff, they’ll pay for it. They don’t look at it. The computer process it and spits out checks. Like Mike is saying, it is like an assembly line with no quality control mechanism.

I want to talk for a second about Cross Plan Offsetting. This is a subject that makes me crazy. It is horribly complicated but a very big problem in healthcare. What this gentleman, Mr. Wilson, did is he submitted all of these fraudulent claims. When they were caught by UnitedHealthcare, you might have caught Marshall saying it before, UnitedHealthcare tried to claw back the money. What happens then is they may be successful in clawing back money but the employer never gets credited for the claw back.

Your claims are artificially elevated. If the mistake, fraud, overbill and double bill, whatever you want to call it, is caught by the insurance company, you are probably not getting credited back for that. That is a huge problem. Kimberly Langford, who has spent her life in the healthcare system, thinks that all of this is eroding public trust and will have serious consequences for people coming down the road. Do you agree with that?

I agree. Sadly, we have people who are deferring the care that they need because they can’t afford it or they’re afraid of getting surprised billed. A sad example of this is a young woman I helped with her medical bill. She got price gouged because her UnitedHealthcare plan had negotiated a discounted rate that was unfair to her for a hospital bill. She had to fight the hospital. She eventually got the bill taken care of but it caused her so much anxiety to fight this bill in her case that she wanted to go to counseling but then she was afraid of what the negotiated payment would be for UnitedHealthcare with her counselor. She needed counseling and she wanted to go get help but she was afraid, “What if my insurance company had also negotiated a bad rate for me to get counseling?”

Sadly, we have people who are deferring the care that they need because they can't afford it or they're afraid of getting surprised by the bill. Share on X

These things compound on one another. We have such a breakdown of trust, especially when you look at the pharmaceutical companies. People know that these price hikes have not been justified by actual improvements in the drugs they’re receiving. There are so many games that take place. This is also where one of the most popular audiences for my books, at least according to the Amazon rankings, has been family medicine. It’s interesting how the doctors, nurses and other clinicians are victims of this stuff too. They’re not generally the problem. The problem is the business side of the industry created these schemes to take our money and it has nothing to do with the quality of care that we need.

Many providers would like to be in the business of being doctors. They don’t want to be in the business of being a collection agency or whatever else. They want to be paid a reasonable amount of money. One of the fastest-growing parts of healthcare is direct primary care or direct patient care. Those doctors have pretty much opted out of the insurance system and it’s fascinating to talk to them. That is a remarkable way to get care into the hands of people.

You can call this person. You have pretty solid, if not almost round-the-clock access. A primary care physician can take care of almost everything that you need. They don’t do heart surgery or cancer treatment but your garden variety stuff and help with some of the serious issues that we have, like metabolic syndrome.

I’m in South Texas. Metabolic syndrome is going to kill South Texas. That’s a fascinating thing. I’m going to irritate a few people I know but people put too much faith in doctors. We don’t give people good tools to find out who is a high-quality provider. My mother was going to a cardiologist with a quality score of 27.8 out of 100 on an index that hospital systems use to judge their physicians. We can do better than that without a whole lot of effort.

Before we wrap up, we have a few more minutes for questions. “What has the experience in this space with large employers who have clients in the major payer-provider space, such as big four accounting firms been?” I don’t have any big four accounting firm clients. Marshall, do you have any insight on that one?

I don’t have a lot but some of the more progressive things that you see are happening with some big employers like Walmart with their Centers of Excellence model they have for surgery. That’s a very progressive thing to do that every employer should be looking at on one level or another. Excuse me if I’m getting this wrong but I’ve read studies and stories about it. I haven’t reported it out myself but my understanding of it is they’ll identify a value-priced hospital for, say orthopedics, who also provides high-quality care. They’ll waive all the cost-sharing and co-insurance for that worker to go to that place for their orthopedic procedure.

If the worker wants to go to another facility, they can but then they have to pay their co-insurance and co-payments. Those costs are a lot higher. They negotiate a direct payment arrangement with that facility that’s a fair price. The facility gets rewarded with all that business from Walmart. Some people might say, “Walmart’s so huge. How are we going to do that?” You are seeing smaller groups of employers in different cities band together to create some direct contracting relationships. We are seeing this happening because employers are realizing, “We can do things differently. These things do work.”

These doctors and hospitals would love to be in a direct pay relationship with you as an employer where they don’t have to go through the nightmare of getting paid by the insurance industry. Fraud is rampant. The payment problems are so out of control. There are some insurance companies that have a 30% rejection rate on their claims. I’m not absolving the doctors or hospitals that work with them. Maybe it’s their fault. Some insurance companies have much higher claims rejection rates than others. The frontline doctors and hospitals might like that direct contracting Centers of Excellence model.

RTB Marshall Allen | Health Care Solutions
Health Care Solutions: These doctors and hospitals would love to be in a direct-pay relationship with you as an employer where they don’t have to go through the nightmare of getting paid by the insurance industry.


I would add that if you’re not in a huge urban city and you have a community or regional hospital, those hospitals are hubs in their communities. They typically deliver good quality care. They are often quite amenable to having a relationship with employers so that they can keep the care in their system. We’ve criticized hospital systems a lot but there are some unique ways and needs that a typical employer wouldn’t. They have different staffing requirements.

Operating a hospital is quite a complex operation and it is a bit like steering a glacier. The more that they can do in their communities, the better it is particularly for the community systems. You don’t want them to go away. A big problem in smaller towns and rural areas is that their hospital systems are gone. They don’t have a place to go.

This client I was talking about went to an urgent care facility and they don’t have a hospital within 50 miles. That’s a whole different kind of issue. Somebody has asked, “Many times, the brokers and consultants are also paid by the carrier. There is a conflict of interest to perform full audits and/or go back to the carrier for a refund.” I know you have a pretty strong opinion about this.

I have a whole chapter in the book about it. I call it the conflict of interest that’s undermining employee health benefits. The standard traditional way for brokers to be compensated is through carriers, PBMs and others. There may be contracts where there are restrictions on auditing the plan and the payments. I’ve pulled some of these ASO agreements. They’re like, “You’re only allowed to audit twenty claims that we select for you to audit.” The auditing is a joke. It’s not an actual audit. It’s certainly not independent. I encourage people to know and you will know soon because you’ll be required to know all of the direct and indirect compensation that your broker or advisor is getting.

A good advisor will have no problem sharing this with you. They’re not going to be worried about it. They’re not going to give you the line that my friend got from his where they said, “We don’t have to tell you that and we’re not going to.” If that’s the answer, you want to start talking to someone else. I do encourage people and employers to look and see if your advisor would be open to a direct pay relationship from you where they only get their money from you.

Look to see if your advisor would be open to a direct-pay relationship with you where they only get their money from you. These advisors are worth their weight in gold. Share on X

These advisors are worth their weight in gold. You want to have a good advisor but if you pay them directly, they’re still going to make their fee, which they are earning but they’re being paid by you. They’re incentivized by you to deliver the best value for you. That’s my take on that. Allison, I’m curious what your thoughts are about that.

I agree. We disclose our fee. We have never had a problem with anybody paying our fee. Most of our business is self-funded. With the TPA, we do include that in the monthly bill but it is disclosed broker fee. That’s fair. We don’t take any additional compensation. If there is somewhere else we’re getting additional compensation, we disclose that. There are a number of advisors on this call. We all work the same way. We all do different things and have different specialties but we all disclose our fees. We’re very clear that this is what we’re paid. We often will work on a performance basis as well so that if we meet your goal, then we earn more compensation. That’s fair too. We work pretty hard.

How many advisors and brokers out there are in the relationship like my friend is finding? Gallagher is the name of his company. I’ll go ahead and say it. How many of them are in this type of relationship where maybe the employer is not aware of all the money that their broker is making?

It’s 97%.

That’s my impression too. This is the norm. There are going to be some very awkward conversations as employers are required to find out about the indirect and direct compensation from their benefits brokers. It’s going to be very interesting to see. It will spur a lot of change and people to start seeing a little more about how the system operates. I’m sure many still won’t change but I know that some will. I’m encouraged by that.

“Any comments on the San Diego lawsuit against KP,” which I’m guessing is Kaiser Permanente, “Molina and Health Net, regarding massive inaccurate in-network physicians? Patients think they’re seeing an in-network doctor only to be billed for an out-network because the in-network info is outdated and inaccurate.” I have an opinion about that but I’d be interested to hear yours.

I’m not even aware of it. I missed that one. I’m interested in hearing your thoughts, Allison.

Anybody in the broker advisor business will tell you that one of the big problems that they have with employer groups is that an employee has made a good-faith effort to do what they are supposed to do. They end up with a bill, typically for a radiologist, an anesthesiologist, a pathologist and an ambulance. Those would be the most common where they thought that they were in the right place.

If you’re in the right hospital and unconscious, there’s not a lot you can do if your anesthesiologist or ER doctor is not in the network. It happens quite a lot there too. The patient gets a surprise bill for sometimes thousands of dollars. What do they do? Insurance companies, when you talk to the people, they feel empathy but there’s nothing that they can do. They pay it according to their contract because insurance is contract law. That’s all it is and then the patients are stuck.

There is Federal legislation that is addressing those issues but this is a past issue. It’s going to be very interesting to see how this plays out, especially since you cannot do that. There are very specific arbitrations that need to happen in certain timeframes. We’re going to see a lot of that go away. Texas remarkably has done a wonderful job with surprise billing legislation. You can’t do it but only in fully insured plans because they’re regulated by the state. Insurance plans are our Federal regulation. I hate to keep people any longer, even though Marshall and I could talk about PBMs for hours and hours.

We could talk forever.

Before we hang up, Allen Health Academy, tell us about that.

Allen Health Academy is a business I’ve started based on the book. I’m creating a series of engaging health literacy videos that explain the principles in the book in an interactive, engaging way. Look for it. You can go to my website, MarshallAllen.com and subscribe to my newsletter for the latest updates. Allison, thank you for asking me about the academy. Stay tuned because there’s a lot more coming from me. I’m on a big push here to improve healthcare literacy for employees.

It’s a mission well worth doing. Marshall, thank you so much for doing this for us.

Thank you. I appreciate the invitation.


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