Your carrier saved you $300,000 on out-of-network claims last year. Then they charged you $90,000 for saving it. This is out-of-network repricing. And it's one of the quietest cost drivers in self-funded health plans.
How the Trick Works
When an employee sees an out-of-network provider, the bill comes in — often wildly inflated. Your carrier or TPA uses a repricing vendor to negotiate that bill down to something more "reasonable." Then they charge you a percentage of the difference as a fee. Sometimes 20–30% of the savings.
Two Problems With This
The structure is rigged in two specific ways:
- The benchmark isn't neutral. The "reasonable" rate they're repricing against is often set by the carrier or their vendor — which means the "savings" are calculated against a number they influenced. Inflate the benchmark, inflate the savings, inflate the fee.
- The vendor may be theirs. If your carrier owns the repricing vendor, the conflict writes itself. A recent New York Times investigation highlighted exactly this — carriers using OON repricing as a mechanism to generate revenue, not protect employers.
"You're paying a percentage of savings you can't independently verify, calculated against a benchmark you didn't set, by a vendor your carrier may own."
What to Demand Instead
The contract permits all of this — but only because nobody pushed back. The fixes are concrete:
- Fixed-fee repricing arrangements, not percentage-of-savings.
- Independent benchmark methodology — disclosed, auditable, and not set by the entity collecting the fee.
- Full disclosure of any vendor relationships your carrier has in the repricing chain.
- Audit rights on every claim where a repricing fee was assessed.
Who sets the benchmark, who owns the repricing vendor, and how is the fee calculated?
If you can't get a clean answer in writing — that's your answer.
— Tess
