Relentless Health Value

How Medicare Fraud in Catheters and Skin Substitutes Sabotages ACO Shared Savings and Cost-Shifts to Self-Insured Employers, With Brian Machut (EP502)

Why $3.5 Billion in Fake Catheters and an Even Bigger Skin Substitute Grift End Up Costing Self-Insured Employers Too. Episode 502.

Hackers are using stolen medical data to bill CMS for catheters and other durable medical equipment that patients never actually received—and that's just one piece of a fraud scheme that adds up to 4% of the entire CMS budget. Stacey Richter talks with Brian Machut, a value-based actuary at Alliant Health, about how this fraud quietly sabotages ACO shared savings, squeezes independent physicians out of business, and cost-shifts downstream onto self-insured employers and other plan sponsors.

WHAT YOU'LL LEARN

✅ How hackers use stolen medical data to bill CMS for catheters and other DME that was never sent to patients, adding up to 4% of the entire CMS budget in a single year

✅ Why ACOs in MSSP and REACH shared-savings programs get hit twice: once when a fraudulently billed patient's costs spike, and again through distorted trend pricing in future years

✅ How lost shared savings squeezes independent PCPs and other practices, often pushing them into consolidation with local health systems

✅ Why skin substitute fraud dwarfs the catheter scheme in dollar terms, and how CMS's SAHS classification decision affects whether that spending counts against an ACO's benchmark

✅ How this fraud ultimately cost-shifts onto self-insured employers, both through the loss of independent-practice competition and through health systems' higher commercial rates

✅ What a value-based actuary actually does all day, and how Brian Machut's team first uncovered this fraud pattern in DME billing data

WHY THIS MATTERS Fraud, waste, and abuse in Medicare isn't just a government problem—it ripples straight into the commercial market. When hackers use stolen data to bill CMS for catheters and skin substitutes that patients never received, ACOs in MSSP and REACH programs can lose their shared savings simply because a fraudulently billed patient's costs spiked. That squeezes independent physicians and practices, often pushing them into consolidation with health systems that then have the leverage to raise commercial rates. As Brian Machut lays out, self-insured employers end up paying for this fraud twice: once as taxpayers, and again as plan sponsors absorbing the downstream cost-shift.

MENTIONED IN THIS EPISODE

Medicare Advantage Advance Notice for 2027: CMS fact sheet

=== LINKS ===

🔗 Show Notes with all mentioned links: Show Notes

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00:00 One way hackers are using medical data to commit Medicare fraud.

01:49 What today's conversation with Brian Machut entails.

02:16 The downstream impact that this Medicare fraud can have.

03:30 A brief outline of how plan sponsors can be affected by this Medicare fraud.

06:38 What does a value-based actuary do?

08:04 The conversation with Brian Machut: What caused his team to look into DME costs and uncover Medicare fraud?

08:46 How much did this fraud scheme cost organizations in 2023?

09:57 How this data was tracked down and uncovered.

11:13 How fee-for-service ACOs work, and why this Medicare fraud affected the ACOs' shared savings.

12:46 The two codes that were the target of this fraud.

15:13 Across the U.S., how much money in 2023 did this fraud, waste, and abuse cost, and what was done about it?

16:14 The framework that was created to combat this fraud spend.

17:49 Why the CMS decision to pull those expenditures negatively affected some ACOs.

20:17 Where things stand now with this catheter fraud.

21:33 Why this fraud is still able to happen.

22:19 Is this a use case for prior authorizations?

23:49 How this Medicare fraud affects self-insured employers and what they should keep in mind.

25:12 What is the correlation to employee affordability?

27:08 A cost that dwarfs the catheter Medicare fraud.

28:21 A brief summary of skin substitutes.

29:32 What SAHS means, and how CMS uses it to calculate an ACO's shared savings.

31:21 Why CMS chose not to classify skin substitutes as SAHS.

33:26 Why this fraud affects ACOs' prospective trend pricing risk.

36:40 Why these fraud cases make participating in ACO programs less appealing to provider organizations.

Why the Same Infusion Costs $135 or $13,560, With Ivana Krajcinovic, PhD (EP501)

How a $135 Infusion Becomes a $13,560 Bill—and the Direct-Contracting Fix for It. Episode 501.

Ivana Krajcinovic, PhD, recently retired vice president for healthcare delivery at UNITE HERE HEALTH, a Taft-Hartley fund that purchases healthcare for over 200,000 unionized hospitality workers and their families, joins Stacey Richter to unpack a jaw-dropping price variation: the same infusion that cost $135 at an independent practice ran $13,560 for the identical drug at the hospital down the street—a 10,000% markup off the billed price, or 40,000% off the Medicare rate. Ivana walks through why carrier networks face zero business consequences for such wild price variation, and lays out the roadmap her team used to fight back, built around data, site-of-care steerage, and direct contracting with independent practices.

WHAT YOU'LL LEARN

✅ Why two members getting infusions at the same hospital instead of down the street cost their plan $1 million more combined—and why that kind of price variation is itself proof there's no real market

✅ How an independent practice charged $135 for a chemo infusion while a hospital charged $13,560 for the exact same drug and infusion—a 10,000% markup over the billed price, or 40,000% over Medicare

✅ Why carrier networks face no business consequences for letting a plan sponsor overspend by a million dollars, since the network itself doesn't lose business as a result

✅ The roadmap UNITE HERE HEALTH used to fight infusion cost variation, from drilling into claims data to carving out utilization management for site-of-care steerage

✅ Why direct contracts with independent practices play a starring role in bringing infusion costs down, and how that strategy ties fiduciary duty, transparency, and collective bargaining power together

WHY THIS MATTERS

When a health plan can pay $135 or $13,560 for the identical infusion depending only on which door the patient walks through, that is not a pricing problem—it's proof that no real market exists to rationalize the cost. As Stacey puts it, if you're waiting on a market to constrain these prices for you, that's magical thinking; every dollar wasted on wild price variation is a dollar that could have gone to wages for the hospitality workers UNITE HERE HEALTH exists to protect.

MENTIONED IN THIS EPISODE

EP373 with Cora Opsahl: Apple Podcasts | Spotify | Other Apps

Take Two: EP398 with Jacob Asher, MD: Apple Podcasts | Spotify

EP483 (Part 1) with Jonathan Baran: Apple Podcasts | Spotify | Other Apps

EP475 with Peter Hayes: Apple Podcasts | Spotify | Other Apps

EP370 with Erik Davis and Autumn Yongchu: Apple Podcasts | Spotify | Other Apps

EP493 with John Quinn: Apple Podcasts | Spotify | Other Apps

EP496 with Mark Newman: Apple Podcasts | Spotify | Other Apps

EP482 with Preston Alexander: Apple Podcasts | Spotify | Other Apps

EP486 with Stan Schwartz, MD: Apple Podcasts | Spotify | Other Apps

EP492 with Sam Flanders, MD, and Shane Cerone: Apple Podcasts | Spotify | Other Apps

EP490 with Shane Cerone and Sam Flanders, MD: Apple Podcasts | Spotify | Other Apps

EP500 with Stacey: Apple Podcasts | Spotify | Other Apps

=== LINKS ===

🔗 Show Notes with all mentioned links: Show Notes

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🫙 Support the podcast with a small donation to the Tip Jar

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=== CONNECT WITH THE RHV TEAM ===

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00:00 $135 vs $13,560: How infusion drug prices play into the "Inches All Around Us" series.

02:02 How infusion drug pricing fits into the "No Market" series.

03:19 A roadmap and more episodes on this topic.

04:36 Introducing this week's expert, Ivana Krajcinovic, PhD.

05:10 A must-read Bloomberg News article on infusion pricing.

05:33 An overview of what to expect from this episode.

06:54 The first tell of the infusion nonmarket.

07:41 The price variations that Ivana has seen in the infusion nonmarket.

11:39 How hospital spend affects wage increases affects patients and employees twice over.

13:43 The second tell of the infusion nonmarket.

16:15 Why networks are apathetic to this pricing discrepancy.

17:55 The factors that play into the nonmarket issue of infusion drug pricing variations.

19:45 Are pricing discrepancies easy to spot?

22:38 Where we have power in a nonmarket situation.

23:22 A recap of the advice in the show so far.

25:51 How you place pricing pressure on an entity.

29:34 How an improved market creates time for better care coordination.

33:23 The fourth part of the roadmap.

36:49 Why serving the community and being fiscally responsible should go hand in hand.

Six Reasons California's Health Plan Market Share Never Changes, Year After Year. Take Two Episode 398.

In this Take Two rebroadcast, Stacey Richter revisits a conversation with Jacob Asher, MD, who spent 14 years as a health plan chief medical officer in California—first at Anthem, then Blue Cross, then Cigna, then UnitedHealthcare—about why the relative market share of the state's biggest commercial carriers hasn't budged in over a decade. Dr. Asher and Stacey unpack why California's commercial health plan market functions less like a competitive marketplace and more like a stalemate. Stacey opens the episode with six reasons—drawn from conversations with Dr. Asher, Wendell Potter, and Lauren Vela—for why that stagnation persists nationwide, not just in California.

WHAT YOU'LL LEARN

✅ Why California's largest health plans—Kaiser, the Blues, and others—have kept nearly the same relative market share for over 14 years despite an apparently competitive landscape

✅ How carriers use higher self-insured employer rates as leverage to negotiate lower Medicare Advantage rates, since it's the employer's money on the commercial side but the carrier's own money in Medicare Advantage

✅ Why Dr. Asher never once heard a sales rep say an employer chose a health plan because of quality rather than price

✅ How provider discount negotiations create a circular dynamic: the biggest plan gets the best price because of its member volume, which lets it offer the lowest premium, which keeps it the biggest plan

✅ Why Kaiser's closed, capitated network makes its cost and quality performance nearly impossible to benchmark against the "same hospitals, same doctors" non-Kaiser market

✅ Six systemic reasons—employer inertia, EBC incentives, ASO economics, provider network overlap, volume-based discounting, and the absence of quality-based buying—for why the commercial carrier market stays boring

WHY THIS MATTERS

If plan sponsors assume competition among carriers will naturally hold down costs or lift quality, this episode is a reality check: in California's commercial market, membership rankings have barely moved in 14 years, and the underlying incentives—volume-based discounts, Medicare Advantage trade-offs, and a total absence of quality-based buying—actively work against disruption. Real change, as Stacey puts it, has to be actively pursued rather than assumed; no one is going to hand plan sponsors a better deal.

MENTIONED IN THIS EPISODE

EP390 with Gloria Sachdev, PharmD, and Chris Skisak, PhD: Apple Podcasts | Spotify | Other Apps

=== LINKS ===

🔗 Show Notes with all mentioned links: Show Notes

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=== CONNECT WITH THE RHV TEAM ===

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00:00 Introduction to the episode.

00:42 The "No Market" series.

01:51 Why is the carrier market boring?

04:26 A breakdown of what follows.

05:48 Six reasons why a marketplace doesn't actually exist.

10:04 Upcoming episodes in the "No Market" series.

10:41 The conversation with Dr. Jacob Asher.

11:01 What is the competitive picture of California's health plans?

11:03 Understanding the California health plan market.

12:28 What the competitive landscape looks like to get market share in California.

12:55 Challenges in market competition.

13:14 What are micro markets and market drivers?

15:14 How brokers and consultants shape the marketplace.

15:49 Why is it difficult to take market share?

16:56 Who was Dr. Asher pitching to and why?

18:56 How is Kaiser's position in the marketplace unique?

19:29 Did employers ever buy plans for quality?

23:23 What does this look like from the payer perspective?

27:42 What improvements have there been to engagement in health plans?

29:47 Have plans gotten better at communicating with employers?

31:19 Why is it hard to compare the Kaiser world to the non-Kaiser world?

31:19 Dr. Asher's final thoughts and reflections.

10 Years and 500 Episodes: What Listeners Say Actually Changed in Healthcare (EP500)

Ten Years, 500 Episodes, and the Listener Stories Proving Healthcare Can Change. Episode 500.

To mark 10 years and 500 episodes, Stacey Richter turns the mic over to the Relentless Health Value Tribe itself, playing voice messages and reading comments from listeners—benefits consultants, physicians, health system executives, and pharmacists—describing the specific decisions the show helped them make. Organized around three themes—moving from theory to practical transformation, the power of collective momentum, and unplugging from healthcare's opacity—the episode is less a highlight reel than a look at how information turns into action across an industry that badly needs it.

WHAT YOU'LL LEARN

✅ Why "moving from theory to practical transformation" showed up again and again in listener stories, from EP373 (Cora Opsahl) reframing failures as design problems to a listener's direct-to-primary-care benefit rollout inspired by a later episode

✅ How the show's transcript-first, practical-over-theoretical format has led listeners to directly implement changes such as switching PBM models, offering new benefit designs, and renegotiating vendor contracts

✅ Why "the power of the tribe and collective momentum" became its own theme, with listeners describing the show as uniting different factions of healthcare change rather than dividing them

✅ How "unplugging from the matrix of healthcare opacity" ties together listener stories about generic drug pricing, EHRs functioning as revenue cycle tools, and shopping for care that isn't actually shoppable

✅ Why Stacey frames the tribe's collective decisions—not the show itself—as the actual mechanism for bending the healthcare cost and quality curve

WHY THIS MATTERS

A podcast doesn't fix healthcare—the decisions its listeners make afterward do. Ten years and 500 episodes in, the throughline across every listener story here is the same: information only matters once it changes a contract, a benefit design, or a conversation with a CEO. That's the actual mechanism by which an industry this opaque and this entrenched slowly bends toward doing right by patients and members.

MENTIONED IN THIS EPISODE

LinkedIn Post by Stacey Richter

EP373 with Cora Opsahl: Apple Podcasts | Spotify | Other Apps

EP391 with Scott Conard, MD: Apple Podcasts | Spotify | Other Apps

EP462 with Scott Conard, MD: Apple Podcasts | Spotify | Other Apps

=== LINKS ===

🔗 Show Notes with all mentioned links: Show Notes

✉️ Enjoy this podcast? Subscribe to the free weekly newsletter

🫙 Support the podcast with a small donation to the Tip Jar

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=== CONNECT WITH THE RHV TEAM ===

✭ LinkedIn ✭ Threads ✭ Bluesky ✭ X

00:00 Introduction and episode 500 announcement.

00:22 The origin of episode 500.

02:43 Celebrating the Relentless Health Tribe.

10:08 Theme 1: Moving From Theory to Practical Transformation.

10:38 Clip from Ken Wosczyna and the episodes that have led to consistently good decisions in his work.

11:27 The Tipping Point by Malcolm Gladwell.

12:55 Examples of tribe members changing and improving their corner of healthcare after being inspired by RHV episodes.

13:54 Clip from Mark Weber.

16:13 Clip from John Lee, MD, and how RHV helped him realize that "gaming the system" can also be used for good.

18:42 Theme 2: The Power of the Tribe and Collective Momentum.

19:28 Clip from Justin Leader.

21:45 Why being a "good villager" is so important to the overall outcome of healthcare.

23:22 Clip from Cristin Dickerson, MD, and how she draws inspiration from various RHV episodes.

25:21 Clip from Andrew Gordon.

27:39 Theme 3: Unplugging From the Matrix of Healthcare Opacity.

28:32 Clip from Andrew Tsang.

29:29 RHV episodes that cover better value out of health benefits.

32:15 Clip from Sergei Polevikov.

34:11 What tech needs to do in order for healthcare to succeed and improve.

35:06 Clip from Bryce Platt, PharmD.

36:01 More RHV episodes on unplugging from pricing opacity.

Why Twisted Ankles Cost Plan Sponsors Millions, With Jay Kimmel, MD (EP499)

The MSK "White Space": How Triage-Before-the-Triage Could Cut Unnecessary Orthopedic Spend. Episode 499.

Jay Kimmel, MD, an orthopedic surgeon with over 35 years in practice and co-founder of Upswing Health, joins Stacey Richter to unpack the "white space" of musculoskeletal (MSK) care—the moment a member twists an ankle or tweaks a back and has no one to call for guidance before deciding between the ER, urgent care, or just going home. MSK spend runs 20–30% of total plan spend and about $16 PMPM, and an estimated 80% of low-acuity injuries would heal on their own, yet lack of access to quick triage routinely sends members into unnecessary imaging, referrals, and even surgery.

WHAT YOU'LL LEARN

✅ Why musculoskeletal (MSK) spend adds up to 20–30% of total plan spend and roughly $16 PMPM—making it one of the costliest categories for self-insured employers

✅ Why an estimated 80% of low-acuity MSK injuries, like a twisted ankle or minor back pain, would heal on their own without any medical intervention

✅ How the disappearance of doctor's lounges and informal curbside consults left patients to self-triage MSK injuries with no clinical guidance, a gap Dr. Kimmel calls the "white space" of MSK care

✅ Why roughly 50% of spine surgeries are considered unnecessary, and how an ER visit for a low-acuity injury can snowball into imaging, a surgical referral, and lost work time

✅ How Upswing Health's model—an athletic trainer within 15 minutes and an orthopedic specialist within 24 hours—gives members "triage before the triage" instead of defaulting to the ER

WHY THIS MATTERS

MSK injuries are exactly the kind of healthcare spend where more care doesn't mean better outcomes—it just means more cost without a corresponding health dividend. When patients are left to self-triage a twisted ankle or a sore back with no one to call, the default path is often the most expensive one: the ER, unnecessary imaging, and a surgical referral for something that would have healed on its own. Closing that white space with fast, low-friction access to real triage is one of the more straightforward inches available to plan sponsors.

MENTIONED IN THIS EPISODE

EP472 with Eric Bricker, MD: Apple Podcasts | Spotify | Other Apps

Study : Lockton High-Cost Claimant 2025 Report

EP464 with Al Lewis: Apple Podcasts | Spotify | Other Apps

EP470 with Nikki King, DHA: Apple Podcasts | Spotify | Other Apps

EP468 with Matt McQuide: Apple Podcasts | Spotify | Other Apps

EP471 with Christine Hale, MD, MBA: Apple Podcasts | Spotify | Other Apps

=== LINKS ===

🔗 Show Notes with all mentioned links: Show Notes

✉️ Enjoy this podcast? Subscribe to the free weekly newsletter

🫙 Support the podcast with a small donation to the Tip Jar

🎤 Follow us on Apple Podcasts

🎤 Follow us on Spotify

📺 Subscribe to our YouTube channel

=== CONNECT WITH THE RHV TEAM ===

✭ LinkedIn ✭ Threads ✭ Bluesky ✭ X

00:00 Introduction.

08:01 What is the "white space" in MSK spend?

13:30 How back pain also easily transitions from a low-acuity issue to a high-acuity problem.

15:11 How plan sponsors can detect their white space downstream spend.

18:15 Why where patients start their journey often dictates where they wind up and how costly that medical pathway is.

20:48 Where PCPs fit into this MSK spend issue.

25:39 Why access is key.

Revenue cycle management is a $140 billion industry — already larger than the US auto industry and growing five times faster. RCM vendors use programmatic clearinghouses and increasingly sophisticated tools to maximize every cent of revenue from a claim. That is their job. On the other side sits the self-insured employer, often relying on less sophisticated processes and vendors who may be financially incented to look the other way. It is, as Mark Noel puts it, an arms race, a tug of war, and a zero sum game. In this episode, Stacey Richter speaks with Mark Noel, CEO of ClaimInsight, who has spent roughly 25 years in payment integrity on the health plan, TPA, and self-insured employer sides, about three revelations buried in plan sponsor claims spend.

WHAT YOU'LL LEARN

✅ Revelation 1 — The small claim goldmine: 80% of claims volume by count is professional claims — doctor's office visits, lab draws, vaccines — not inpatient surgeries. Overpayments of $2, $5, or $10 on thousands of claims add up to millions in annual waste, but most prepayment integrity resources are focused on the 20% of large claims while the small-dollar volume flies through unchecked

✅ Revelation 2 — The conflict of interest trap: asking a TPA to report on its own errors is like asking the person who filed your tax return to also conduct the penalty audit — and large ASO TPAs edit claims on their fully insured book (where the dollars come out of their own pocket) at materially higher rates than on ASO client claims (where the dollars come out of the employer's pocket)

✅ Revelation 3 — Shared savings perverse incentives: many carrier and TPA contracts allow them to earn shared savings on the backend for fixing errors they did not catch on the frontend — creating a direct financial incentive to let errors through prepayment so they can be "recovered" for a fee later

✅ Why prepayment integrity must happen at the TPA level: to catch small errors before payment, a payment integrity vendor must be connected to the claims processor in real time — retrospective review can show where a plan has been overpaying and inform TPA contract negotiations, but the real savings require integration upstream

✅ The Goldilocks problem with turning on edits: turning on every available policy creates excessive provider friction and can inadvertently flag legitimate claims — including in sensitive areas like cancer treatment — so the right approach is a deliberate conversation with the plan about what edits to turn on, not "maximize everything and react when providers bark"

✅ Why this is a member protection issue, not just a financial one: 41% of Americans have medical debt; when claims are overpaid and members are on co-insurance, the member pays a portion of that error too — payment integrity is both a fiduciary obligation and a direct protection for the people the plan is supposed to serve

WHY THIS MATTERS

The RCM side will be up to date. Every January, coding rules update and RCM vendors adjust immediately. Payment integrity vendors that are not keeping policies equally current are falling behind in real time. For self-insured employers who are relying on a TPA's in-house payment integrity program, the question worth asking is: are those edits running at the same level of rigor on your ASO claims as on the carrier's fully insured book? The honest answer, in most cases, is no.

=== LINKS ===

🔗 Show Notes with all mentioned links: Episode Page

✉️ Enjoy this podcast? Subscribe to the free weekly newsletter

✉️ Visit ClaimInsight

🫙 Support the podcast with a small donation to the Tip Jar

🎤 Listen on Apple Podcasts

🎤 Listen on Spotify

📺 Subscribe to our YouTube channel

=== CONNECT WITH THE RHV TEAM ===

✭ LinkedIn ✭ Threads ✭ Bluesky ✭ X

00:00 Introduction.

06:03 How millions of dollars can be recovered per year from smaller claims under $500.

07:46 EP486 with Stan Schwartz, MD.

09:10 How to get to payment integrity prepayment.

11:20 How payment processing efficiency is necessary to payment integrity.

13:59 How TPAs fit into the claims payment process and how they can add to payment integrity.

15:59 LinkedIn post from Chris Deacon.

16:50 EP433 with Justin Leader.

17:04 LinkedIn post from Justin Leader.

17:10 How shared savings incentives can be perverse incentives.

23:05 How employers are doing retrospective reviews.

24:29 How employers should be negotiating their TPA contracts.

25:41 EP285 with Dawn Cornelis.

25:43 EP480 with Kimberly Carleson.

27:40 Why it's imperative that payment integrity vendors are up-to-date on all policies.

30:00 EP497 with Zack Kanter.

31:13 What should self-insured employers do to assess their payment integrity?

What FQHCs Can Teach Every Healthcare Leader About True Fiscal Discipline.

There are two very different ways to end up with no profit. One is genuine struggle. The other is simply being very good at spending every dollar you are given. In healthcare, we have no functioning market to tell the difference — and the organizations that are crying poor may just be inefficient. Federally qualified health centers, which cannot cost-shift to commercial patients and cannot restrict access, are one of the few places in American healthcare where fiscal discipline is a real constraint rather than a slogan. In this Take Two episode, Stacey Richter revisits a conversation with Gary Campbell, CEO of Johnson Health Center, an FQHC in Lynchburg, Virginia, and president of Impact2Lead — along with a framing segment on Nikki King, CEO of Alliance Health Centers in Indiana, whose approach to meeting patients where they are produced results without a capital budget.

WHAT YOU'LL LEARN

✅ Why FQHCs are one of the best case studies for operational efficiency in healthcare: they have a revenue cap, cannot cost-shift inefficiencies to commercial patients, cannot restrict access, and must find a way to serve a challenging patient population with what they have — or that patient population does not get care

✅ Nikki King's approach at Alliance Health Centers: instead of building infrastructure, she put clinics in a courthouse (next to addiction treatment referrals from judges), a daycare center, a homeless shelter, and beside a basketball court — meeting patients where they already are at near-zero real estate cost; compare this to "razor thin margins" and new construction appearing in the same sentence

✅ Why the first instinct in any workflow problem — throwing a body at it — is often the wrong one: as Gary Campbell puts it, you can overstaff yourself into margins so thin they disappear, and "throw two bodies at it" is not a Six Sigma approach to operational efficiency

✅ Why involving clinicians in process redesign is not optional: administrators who make workflow decisions without including the nurses, physicians, and APPs who do the work get non-compliance, workarounds, and resentment — the people closest to the work have to be part of building the standards

✅ How to create fiscal discipline without sacrificing care: Campbell deliberately pulls clinicians off the floor — foregoing short-term revenue — to work on care team reengineering projects, with deliverables, project plans, and accountability, because unimplemented committee recommendations are worse than no meeting at all

✅ The leadership imperative that underlies all of it: vision (if the team can't see where they are going, they cannot be motivated around purpose), cultural alignment (people who are misaligned with the values will undermine the effort), and the discipline to make sure every meeting produces a concrete outcome — not just a record that it occurred

WHY THIS MATTERS

Financial toxicity is clinical toxicity. A clinical partner that lacks fiscal discipline isn't struggling — it is inefficient. And the plan sponsor, the union, and ultimately the member pays for that inefficiency in premiums, in cost shifts, and in care that should cost less than it does. FQHCs that do this well — like Johnson Health Center and Alliance Health Centers — show what is actually possible when the option to pass the cost along simply does not exist. Those organizations make genuinely useful benchmarks for any plan sponsor evaluating a clinical partner.

=== LINKS ===

🔗 Show Notes with all mentioned links: Episode Page

✉️ Enjoy this podcast? Subscribe to the free weekly newsletter

🫙 Support the podcast with a small donation to the Tip Jar

🎤 Listen on Apple Podcasts

🎤 Listen on Spotify

📺 Subscribe to our YouTube channel

=== CONNECT WITH THE RHV TEAM ===

✭ LinkedIn ✭ Threads ✭ Bluesky ✭ X

00:00 Introduction.

09:03 Why is there no opportunity to cost shift in an FQHC?

09:34 What happens when an FQHC is operating inefficiently?

10:00 "Have you workflowed it out? … You can overstaff yourself in a way that your cost per patient goes way up."

10:23 Why is taking a lean approach not an excuse to cut staff?

11:27 EP490 and EP492 with Shane Cerone and Sam Flanders, MD.

11:35 EP438 with John Lee, MD.

11:38 EP455 with Beau Raymond, MD.

11:40 EP402 with Amy Scanlan, MD.

11:42 EP405 with Eric Gallagher.

12:48 "The nurses are linchpins to everything."

13:44 LinkedIn post from Eve Cunningham, MD, MBA.

15:10 How does standardizing care lead to personalization of care?

16:34 "Our clinical teams see that we care."

16:53 "If you don't have a vision for where you want to be two and three years down the road, you're struggling."

17:09 "I want everybody to understand, What is their why?"

19:45 Lean & Meaningful by Roger E. Herman and Joyce L. Gioia.

24:44 "You have to project plan things out that you want."

25:51 "They don't teach leadership in most medical schools."—Dr. Robert Pearl

26:46 Outlive by Peter Attia, MD.

27:55 "Get to know these clinicians."

29:39 "From a core values perspective, you can make every single decision … on core values."

30:03 "We always start with those values. … They're embedded in everything we do."

30:20 How does an FQHC or private practices that are patient-oriented attract talent?

35:24 EP297 with Jerry Durham.

35:54 "First and foremost, be visible."

Healthcare Transactions Cost 1,000 Times More Than They Should — Here's Why Clearinghouses Are Part of the Problem

Sending a claim through a healthcare clearinghouse costs 10 to 15 cents per transaction. Sending a thousand business emails at scale costs about 15 cents total. That is a thousand-to-one cost differential for something that healthcare has actually standardized more rigorously than most other industries — thanks to HIPAA's administrative simplification rules, which mandate X12 standard transaction formats, ICD-10 codes, CPT codes, and HCPCS codes. Logistics and retail would kill for that level of standardization. Healthcare has it and still pays 1,000 times more per transaction. In this episode, Stacey Richter speaks with Zack Kanter, CEO and founder of Stedi — the programmable healthcare clearinghouse — about the $5–$7 billion a year sitting in healthcare transaction processing costs that should be roughly 90% lower, the days of delay baked into batch-based legacy clearinghouse architecture, and why this is fundamentally an incentives problem more than a technology problem.

WHAT YOU'LL LEARN

✅ What a clearinghouse actually does: it acts as a hub connecting all providers with all payers so that a practice doesn't have to set up separate authenticated data connections, BAAs, and field mappings with every payer — one connection routes claims, eligibility checks, claim status requests, and prior auth transactions to the right destination

✅ Why healthcare transactions cost 1,000 times more than other industries despite HIPAA standardization: the standards lower the technical complexity, but legacy batch-based systems, lack of competitive pressure, and payer incentives to maintain the float have kept the infrastructure expensive and slow

✅ Why the batch processing train-stop model adds days to every transaction: clearinghouses pick up files every 30 minutes to 12 hours, queue them for transmission, and payers receive and adjudicate on their own batch schedules — miss one train by a minute and you wait 24 hours for the next one, adding receivables days for providers and delays in clinical decisions for patients

✅ Why this is not really a technology problem: the technology to make these transactions instant and cheap already exists — what is missing is incentive to use it, because payers benefit from the float on billions of dollars held for additional days, and clearinghouses owned by payers have limited motivation to disintermediate themselves

✅ How opacity compounds the cost: when a claim goes wrong across the clearinghouse/EHR boundary, neither side can easily tell where the problem is sitting — providers call to find out whether their prior auth is approved while the request is held up somewhere in a batch queue between train stops

✅ What plan sponsors should understand about the arms race: RCM vendors on the provider side are already using programmatic clearinghouses to maximize revenue in real time; plan sponsors who do not have equally programmatic prepayment integrity programs connected to the same data streams are bringing an increasingly rusty knife to a gunfight

WHY THIS MATTERS

Every extra day in the transaction pipeline is a day a provider waits to get paid, a day a patient doesn't know whether their procedure is approved, and a day the patient may have moved or forgotten the context — reducing collection rates and potentially delaying care. Fixing the pipes does not require eliminating clinical review. It means replacing batch jobs with real-time processing for the tens of thousands of technical validation rules that should be instantaneous. The technology is not the obstacle. The incentives are.

=== LINKS ===

🔗 Show Notes with all mentioned links: Episode Page

🔗 Visit Stedi

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=== CONNECT WITH THE RHV TEAM ===

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00:00 Introduction.

09:47 What things are being paid for that we might not be aware we're paying for in healthcare?

12:09 Why HIPAA actually makes healthcare more standardized than other industries.

15:35 How healthcare is ahead in some ways and behind in others.

18:03 Where do the 4 to 5 days come from in healthcare transaction processing?

20:39 Why these transaction delays affect care delay.

23:14 EP482 with Preston Alexander.

23:18 EP472 with Eric Bricker, MD.

27:10 How should the process work from the time a provider clicks "validate"?

30:19 Why is the clearinghouse the right place to solve all these issues?

31:41 Why are we where we are in terms of these issues?

35:28 Why people should be looking at their clearinghouse costs.

36:59 What to know about Stedi.

Plan Sponsors Pay $1.20 to Buy $1 of Healthcare — and Providers Collect 80 Cents of That

A self-insured employer pays $1.20–$1.30 to access a dollar of negotiated healthcare. Providers budget their business around collecting 70 to 80 cents of what they are contractually owed — because denial rates, unpaid patient balances, and collection timelines of 2 to 9 months are the operating reality. The gap — roughly $1.5 trillion a year by Mark Newman's accounting — is not one boogeyman. It is just the cost of the friction. In this episode, Stacey Richter speaks with Mark Newman, CEO and founder of Nomi Health, about why the life of a claim produces administrative waste accounting for 28–30% of total US healthcare spending — and the two structural reasons behind it.

WHAT YOU'LL LEARN

✅ Revelation 1 — Data isn't data: as a claim moves through the system, each stakeholder — provider clinical team, provider billing, TPA operations, TPA payments, TPA treasury, plan sponsor HR, plan sponsor finance — works from a different data set with different fields, accounting periods, and definitions of what the transaction was

✅ How the fragmentation creates a barrier to negotiation: a plan sponsor says "we spent $10 million with you last year"; the hospital says "we received $5 million" — and both could be correct, once you account for member balances never collected, accounting method differences, and what the plan funded vs. what it accrued

✅ Revelation 2 — A dollar isn't a dollar: the employer pays $1.20–$1.30 to access a dollar of care (admin fees, consulting fees, PEPMs, transactional fees, broker costs, stop-loss); the provider collects 70–80 cents of what they are owed; and 12–15% of any health system or practice budget now goes to RCM staff — the cost of just figuring out how to get paid

✅ Why payment delays are not accidental: payers make 10–20% of profit margin on float — on billions held while providers wait 2 to 9 months to get paid — and providers, unable to run their business on the hope of a dollar, budget for 80 cents and absorb the rest as RCM overhead

✅ Why finance and HR within the same employer will have fundamentally different numbers: HR tracks cash claims outflows against a budget burn-down; finance accrues a flat monthly amount and hopes not to overrun Q4; neither may have line-item visibility into what the TPA is actually doing with the funds

✅ Why the gap is an opportunity: self-insured employers know how to negotiate, buy things, and manage cost of goods sold — the infrastructure to do that directly in healthcare is finally starting to exist

WHY THIS MATTERS

School districts cannot hire teachers because per-family healthcare costs have hit $40,000 a year and rising. Every dollar in friction is a dollar not available for wages, not available for better care, not reducing premiums — Figure out the comp model, as Charlie Munger said, and you know the outcome. The comp model for large payers rewards earnings per share and swagger — not lower costs. The only way forward is to bypass the 27 layers, and self-insured employers are the parties with purchasing leverage to do it.

=== LINKS ===

🔗 Show Notes with all mentioned links: Episode Page

🔗 Visit our sponsor Nomi Health

✉️ Enjoy this podcast? Subscribe to the free weekly newsletter

🫙 Support the podcast with a small donation to the Tip Jar

🎤 Listen on Apple Podcasts

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📺 Subscribe to our YouTube channel

=== CONNECT WITH THE RHV TEAM ===

✭ LinkedIn ✭ Threads ✭ Bluesky ✭ X

00:00 Introduction.

06:48 What is actionable to know about the life of a claim?

08:14 How data can change as it moves through the claims process.

11:45 Why a dollar isn't a dollar in healthcare.

18:50 Why employers are actually paying more than a dollar to access a dollar of healthcare (the medical loss ratio).

21:54 Why cutting out the "friction" is actually better for employees and members.

22:48 EP482 with Preston Alexander.

22:50 EP472 with Eric Bricker, MD.

23:36 EP490 and EP492 with Sam Flanders, MD, and Shane Cerone.

23:53 Infographic by Andrew Tsang showing 27 streams of income.

26:53 How do we fix these issues?

28:05 LinkedIn comment from Sandra Raup.

28:59 How Nomi Health is experimenting with a no co-payment, no deductible model.

31:29 INBW42 with Stacey on moral hazard.

32:26 EP486 with Stan Schwartz, MD.

32:31 EP485 with Cristin Dickerson, MD.

32:56 The Innovator's Dilemma by Clayton M. Christensen.

34:55 How does Nomi Health work with and help employers?

This is Part 2 of Stacey's year-end synthesis of the most actionable themes from 2025. Last week covered Themes 1–3. This week covers 4 and 5 — which are, if you squint, really two sides of the same problem: plan sponsors can't buy value when they can't see what they're buying, and they can't see what they're buying because the vendors who benefit from opacity are the ones controlling the data.

WHAT YOU'LL LEARN

✅ Theme 4 — Lack of transparency and data access allows wild overspending and undermines fiduciary duty: status quo TPAs, PBMs, and brokers routinely withhold essential claims data, creating "data hostage" situations that expose self-insured employers to both financial and legal risk — Elizabeth Mitchell from PBGH puts it directly: jumbo employers are spending over $350 billion a year on healthcare services and people's health is not improving, yet carriers are "remarkably resistant" to even sharing data their clients are legally entitled to under the CAA

✅ How the transparency gap plays out for members: patients with so-called good insurance now fear unexpected bills enough to delay or abandon necessary care — suspicious moles, chest pain, asthma inhalers — worsening long-term health outcomes in ways that compound costs downstream

✅ The hospital price and ownership transparency angle: up to 80% of hospital bills may contain errors; carrier spread pricing adds an estimated 30% on top of what hospitals actually charge; and without itemized bill access, plan sponsors have no way to know which part of their spend is going to clinicians vs. getting absorbed by intermediaries or health system administrative expansion

✅ Theme 5 — Shifting purchasing from discounts and volume to value: the healthcare cost flywheel is driven by buying discounts off inflated list prices — and as Mark Cuban describes it, the fix is direct contracting where providers get cash upfront, zero member deductible, zero collection risk, and zero prior auth denial risk; in return, the plan gets pricing at or near cash/Medicare rates

✅ What Sarah Emond explains about rebates vs. value: the rebate model rewards market dominance and discount size, not clinical outcomes — if payers paid value-based prices, prior auth requirements and cost sharing could largely disappear, and physicians could prescribe the drug that's actually best for the patient rather than the one that generated the best rebate negotiation

✅ Why self-insured employers are the demand curve — or there isn't one: 160 million Americans get coverage through self-insured employers; if those employers don't act as an elastic demand curve — meaning they stop buying from high-cost, low-value providers — there is no market incentive for anyone on the supply side to lower prices or improve quality; the market that everyone assumes is constraining healthcare costs does not exist without a demand curve

WHY THIS MATTERS

The one-star Spotify review Stacey received this year said this was an echo chamber for out-of-touch CEOs. Stacey's response: when employers shift purchasing to value and pay upfront at fair prices, clinicians get paid more, faster, with less administrative overhead. The interests are more aligned than they appear. The opacity is what keeps them from finding each other. Theme 4 and Theme 5 are not abstract policy goals — they are the infrastructure on which better outcomes, lower member costs, and sustainable clinical practice all depend.

=== LINKS ===

🔗 Show Notes with all mentioned links: Episode Page

✉️ Enjoy this podcast? Subscribe to the free weekly newsletter

🫙 Support the podcast with a small donation to the Tip Jar

🎤 Listen on Apple Podcasts

🎤 Listen on Spotify

📺 Subscribe to our YouTube channel

=== CONNECT WITH THE RHV TEAM ===

✭ LinkedIn ✭ Threads ✭ Bluesky ✭ X

00:00 Introduction

03:30 Theme 4: lack of transparency and data access.

04:46 Clip of Elizabeth Mitchell from EP436.

07:07 Is there a tipping point finally coming regarding transparency?

08:58 Why and how siloed data is also part of this transparency issue.

11:37 How opaque pricing leads to more opaque pricing.

13:21 The need for transparency around ownership and what that looks like in healthcare.

14:06 Theme 5: the need to shift purchasing from discounts/volume to value.

14:52 Clip of Mark Cuban from EP488.

16:35 Clip of Sarah Emond from EP494.

17:02 How pricing transparency can eliminate the need for rebates and prior authorizations.

18:30 Why healthcare needs a demand curve.

22:09 Shows covered in 2025 that touched on other timely ideas.