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Twice-Weekly Briefing
Tuesday, September 8, 2026
Issue 260908-61
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The MOC Brief
Health policy, priced and translated for self-funded plan sponsors
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In This Edition
Five developments, and what each one costs you.
| 1. | Your administrator's defense may be that you never audited it | | 2. | RAND names the shared savings fee employers cannot see | | 3. | A House bill would write AI denial limits into ERISA | | 4. | The FDA approved camizestrant with a companion test attached | | 5. | A medical equipment scheme sent statements for equipment nobody delivered |
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| 1 · ERISA LITIGATION · August 26, 2026 |
| Blue Cross Blue Shield of Michigan Says the Employers Suing It Never Used Their Audit Rights |
| Blue Cross Blue Shield of Michigan filed an 86 page answer on August 26, 2026 in Wesco, Inc. v. Blue Cross Blue Shield of Michigan, No. 1:26-cv-00895, in the Western District of Michigan, where three Michigan employers and their self-funded plans are suing over how claims were paid. The filing raises 17 affirmative defenses and adds three counterclaims, two against all three employers for co-fiduciary liability under ERISA and for indemnification, and one against Wesco alone for breach of a contractual release. Its Tenth Affirmative Defense states that the employers "also never attempted to exercise their respective audit rights," and the co-fiduciary count repeats that they "never exercised any of their audit rights under the ASC." Blue Cross also points to a Schedule A the employers signed agreeing that it would "retain as administrative compensation 30% of the recoveries or cost avoidance" under its Shared Savings Program, and to a contract term requiring written notice of a disputed claim "within 60 days of Group's access to a paid Claims listing." On August 31 the parties filed a joint notice selecting Judge Gerald Rosen of JAMS as facilitative mediator. No court has decided any of this, and every counterclaim is an allegation. |
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MOC Perspective
Read this as a preview of what your own administrator would say if you ever sued it. Blue Cross alleges the employers never exercised an audit right and never met a written dispute window, and both allegations are unproven. Sending the dispute notice costs nothing, the audit costs what an auditor charges, and both rights are sitting in your administrative services contract today.
What to do now
| ▪ | Pull your administrative services contract this week and find the audit rights clause and the dispute window, which runs 60 days in the agreement at issue here. | | ▪ | Ask your administrator in writing what monthly claim volume your audit right actually covers, and set a deadline for the answer before your next renewal. | | ▪ | Calendar a claims audit before your plan year closes and keep the engagement letter, since an unused audit right is the first thing Blue Cross reached for. |
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| Source: Answer of Blue Cross Blue Shield of Michigan, No. 1:26-cv-00895 (W.D. Mich.), via the Georgetown Health Care Litigation Tracker |
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| 2 · VENDOR FEES · August 24, 2026 |
| RAND Finds the Shared Savings Fee an Administrator Keeps Can Run Larger Than the Provider's Payment |
| RAND published a policy brief on August 24, 2026, report number RRA5144-1, on cost control in self-funded employer health plans. It draws on 22 semi-structured interviews with 34 participants conducted in the fall of 2025, and it names five reinforcing barriers, among them that "Most employers don't have the expertise," that "Key players lack aligned incentives," that "Fees are complex and hard to see," and that "Consolidation leaves employers with fewer choices." The charge RAND calls "especially controversial" is the shared savings fee, "typically calculated as a percentage of the gap between a provider's billed charge and the amount actually paid," and the brief writes that "Because these fees are often uncapped, they can end up larger than the payment the provider itself receives for the service." It lists overpayment recovery fees, network access fees, a la carte add on fees, and cross plan offsetting as further costs employers carry. RAND also records that the Consolidated Appropriations Act of 2026 broadens ERISA section 408(b)(2) fee disclosure to cover third party administrators, carries civil penalties up to $10,000 a day for disclosure failures, and takes effect for most provisions for plan years beginning on or after August 3, 2028. |
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MOC Perspective
You are the fiduciary, and the fee RAND says you cannot see is the same one Blue Cross is defending in Michigan. A shared savings fee taken as a percentage of the gap pays your administrator more when the bill starts higher, which is the opposite of the incentive you thought you bought. August 3, 2028 is when most of the 2026 act's disclosure rules land, and that is a date to negotiate against, not a date to wait for.
What to do now
| ▪ | Request a written schedule of every fee your administrator retains, naming shared savings, overpayment recovery, network access and per claim fees separately, and set a 30 day deadline. | | ▪ | Compare that schedule against the per employee per month administrative fee you already track, and ask which of the five cost types RAND names apply to your plan. | | ▪ | Put August 3, 2028 in your contracting calendar and write the disclosure terms into your next renewal rather than waiting for the rule to arrive. |
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| Source: RAND Corporation |
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| 3 · CLAIMS AUTOMATION · September 1, 2026 |
| A New House Bill Would Bar Artificial Intelligence From Issuing Claim Denials Under ERISA |
| H.R. 10210, the Doctors Not AI Act of 2026, was introduced in the House on September 1, 2026 by Representative Landsman with three cosponsors. Its official title says it would amend title XXVII of the Public Health Service Act, the Employee Retirement Income Security Act of 1974, and the Internal Revenue Code of 1986, and the ERISA half rewrites section 503, the claims procedure section a self-funded plan already runs on. The bill would require that a determination "is not issued by an artificial intelligence system and is not dictated or determined by the output of such system," and that the reviewing professional "shall not treat any output of an artificial intelligence system as presumptively valid or defer to such output in lieu of independent clinical judgment." Where such a system was used, the denial notice would have to carry "a statement that such system was used," a description of its role in the review, and "the name, professional license, and credentials of the licensed health care professional who made the determination." The requirements would apply to plan years beginning on or after January 1 of the first calendar year beginning not less than 12 months after enactment. The bill has been introduced and nothing more, it writes no penalty of its own though it inserts a new section 9815A into the chapter of the Internal Revenue Code where an excise tax already applies, and it has not been marked up or scheduled. |
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MOC Perspective
The reason to read this one is where it lands rather than what it says. Amending ERISA section 503 puts the obligation on the plan, not only on a carrier or a delegated review vendor, and the reviewing clinician's name and credentials would appear in the notice your member reads. Nothing is required of you today, and nothing would be for at least a year after any enactment.
What to do now
| ▪ | Ask your administrator in writing where an algorithm sits in your medical necessity workflow today, and set a date for the answer before your January renewal. | | ▪ | Obtain the name and credentials of the licensed clinician of record on your last 20 adverse determinations. | | ▪ | Track H.R. 10210 rather than budgeting for it, since the bill sets no requirement until at least 12 months after any enactment. |
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| Source: U.S. House of Representatives, via GovInfo |
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| 4 · SPECIALTY MONITORING · September 4, 2026 |
| The FDA Approved a Breast Cancer Drug and Authorized the Test That Decides Who Gets It |
| On September 4, 2026 the FDA granted accelerated approval to Etcamah, camizestrant, in combination with a CDK4/6 inhibitor, abemaciclib, palbociclib or ribociclib, for adult patients with hormone receptor positive, HER2 negative, locally advanced or metastatic breast cancer "upon detection of estrogen receptor-1 (ESR1) mutation during aromatase inhibitor and CDK 4/6 inhibitor therapy, based on an FDA-authorized test." The same announcement authorized the Guardant360 CDx assay as the companion diagnostic that identifies those patients. Estimated median progression free survival was 16 months in the Etcamah and CDK4/6 inhibitor arm and 9.2 months in the aromatase inhibitor and CDK4/6 inhibitor arm. The approval is accelerated, and the FDA states that "additional evidence is needed to confirm clinical benefit" and that it "has required confirmatory studies to verify and describe clinical benefit." The drug carries a boxed warning for the risk of irregular heart rhythm when it is taken with certain other medications, along with warnings and precautions for an abnormally slow heart rate and for potential harm to an unborn baby. The announcement gives no price and sets no testing schedule. |
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MOC Perspective
The indication is written around a laboratory result rather than a scan, so the trigger for treatment is a test your plan pays for repeatedly while a member is still on another therapy. The FDA set no frequency, which means your utilization management policy sets it or nothing does. Progression free survival is not overall survival, and the agency has required confirmatory studies, so a request framed as life extension is asking for more than this approval supports.
What to do now
| ▪ | Confirm with your medical benefit vendor within 30 days whether Guardant360 CDx is covered, under which benefit, and whether repeat testing carries any frequency limit. | | ▪ | Require a documented ESR1 result and one of the three named CDK4/6 inhibitors in your prior authorization criteria for camizestrant, because the FDA indication covers the combination and not the drug on its own. | | ▪ | Model 12 months of repeat molecular testing for your breast cancer population before your 2027 renewal, since the FDA announcement published neither a testing schedule nor a price you can budget against. |
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| Source: U.S. Food and Drug Administration |
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| 5 · PLAN FRAUD · September 4, 2026 |
| Prosecutors Say a Medical Equipment Company Billed $1.3 Billion Across Medicare and Employer Plans |
| The U.S. Attorney's Office in Massachusetts announced on September 4, 2026 that a federal grand jury charged Erekle Gugava with one count of money laundering conspiracy. Prosecutors connect that charge to ND Medical Solutions, LLC, a durable medical equipment company in Pennsylvania. Between February 2025 and July 2025, the office says, ND Medical "submitted at least $1.3 billion in fraudulent DME claims to Medicare, private health insurance companies that contracted to provide Medicare supplemental insurance policies, private employer-sponsored plans and union health plans." Those insurers paid ND Medical approximately $6.5 million. The billings relied on stolen identities, and individuals received explanation of benefit forms "that reflected them purportedly receiving DME that they did not in fact receive," with many of them reporting their concerns to Medicare and its contractors. The Labor Department's Employee Benefits Security Administration is among the agencies on the announcement, alongside HHS OIG, the FBI, the Postal Inspection Service, IRS Criminal Investigation and Homeland Security Investigations. Gugava faces up to 20 years in prison, and the office states that he "is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in the court of law." |
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MOC Perspective
About half a cent on the dollar actually got paid, and the release does not say why, so do not assume your own claim edits are the reason. What it does describe is people reading a benefit statement for equipment they never received and calling it in, which is the cheapest detection tool your plan owns. EBSA's Boston regional office is on the announcement, which is what happens when ERISA plans are among the payers billed.
What to do now
| ▪ | Ask your administrator for its durable medical equipment prepayment edits and the dollar value it rejected over the last 12 months. | | ▪ | Run a lookback for high volume equipment suppliers that first appeared in your claims file after January 2025. | | ▪ | Tell members in your next benefits communication to report a statement for equipment they never received, and give them one phone number that reaches a person. |
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| Source: U.S. Attorney's Office, District of Massachusetts |
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The Bottom Line
Three of these five stories come down to the same question, which is what you actually know about how your claims get paid. Blue Cross says its customers never used their audit rights. RAND says the shared savings fee is built so employers cannot see it. A grand jury says $1.3 billion in fake claims went out over five months and about $6.5 million of it got paid. The audit right and the claims file are already yours to ask for, and the fee schedule is the one RAND says you will have to negotiate for, which is why the 2028 disclosure date belongs in your contracting calendar now.
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Jude Odu
Founder and Principal, Model Optimal Care
Author of Model Optimal Care: End U.S. Healthcare Waste, One Health Plan at a Time
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