Blog Posts by Kyle Monroe

Kyle L. Monroe

Vice President, Network Development & Provider Relations

Kyle Monroe joined The Alliance in 2017 as vice president of network development and provider relations. His responsibilities include creating and maintaining relationships with health systems, clinicians and other providers to support The Alliance’s strategic goals of improving health care value and organizational growth. He also designs and adopts purchasing and reimbursement mechanisms to accelerate progress toward high value, safe care delivery.

Before moving to Madison, Kyle served on the Board of Directors for the Healthcare Financial Management Association-Kentucky Chapter. He also was on the advisory board for ValidCare, a company dedicated to developing and implementing mobile technology for patients and caregivers.

Kyle received his Masters of Business Administration in accounting and finance from the University Of Louisville College Of Business and his Bachelor of Arts degree from DePauw University in Greencastle, Ind.

Hospital consolidation – when two or more providers merge – has become a growing concern among employers and other health care purchasers, and its presence looms large after facing the fallout of COVID-19. However, hospital consolidation didn’t arrive with the pandemic, nor will it leave with it.

The coronavirus may have led to decreased health care spending by consumers and declined revenue for some providers (which left those operating independently especially vulnerable to being bought out).  Still, provider consolidation was growing at a record rate before the virus.
Hospital Consolidation Runs Rampant
In fact, hospital consolidation grew every year from 2009-2015, more than doubling over that time period. The pandemic has only exacerbated hospital consolidation, which doesn’t just happen with struggling providers. Only 20% of mergers in 2018 involved a “financially distressed” partner, and 19% of the sellers (or smaller partners) had net annual revenues of more than $500 million.
Consumers’ Chief Concern: High Prices
Dr. Marty Makary himself, a self-proclaimed optimist, recently asserted that his biggest fear for the future of health care was hospital consolidation. So why is it such a big deal? It tends to result in higher prices.

Although hospital consolidation can lead to lower operating costs for hospitals when they merge, their service prices actually go up. And nearby, competing hospital systems raise their prices, too. But employers don’t just care about price – they care about the quality of care their employee families receive. Unfortunately, provider consolidation has not led to improved quality. Hospital competition – not consolidation – leads to improved quality of care.
Using Hospital Consolidation to Lower Prices
The Alliance has thought about, and dealt with, hospital consolidation over the past 30 years.  And we’ve found a path forward. We’re using hospital consolidation to instead lower prices.

The Alliance has put contracts in place to protect employers from sudden increases in price that can result from hospital mergers and acquisitions. We also require due notice of ownership changes within our contracts. When hospitals merge, The Alliance uses it as an opportunity to revisit its contracts with those providers. We can then either keep those contracts intact, renegotiate them for lower rates, or terminate the contracts altogether. Typically, providers work with us to accept new, lower rates to ensure they can still serve the communities in which they operate.

For example, one of our providers recently doubled in size due to hospital mergers, and they called us to ask the best way to move forward with new contracts. Those negotiations actually led to a reduction in price at every single facility involved in the merger.

And having access to a large network of providers, like that of The Alliance, remains another good line of defense against rising costs (and out-of-network bills) from growing hospital consolidation.
Working with – Not Against – Hospital Consolidation
All this to say: although the trend of hospital consolidation shows prices go higher, it isn’t ubiquitous. The Alliance understands that providers want to do what’s right for the employers and patients in their communities, and we use that knowledge (and our 30 years of self-funding experience) to craft our contracts. Larger insurers don’t have the same protections built into their contracts, forcing most employers to accept rising costs, no matter the reason.

The Alliance creates a dialogue with well-intentioned providers and leverages our not-for-profit status to create better rates for employers in their communities. Providers care about the people they serve; The Alliance simply creates contracts that hold them accountable.
Using Unique Contracting Methods to Protect Employers
In conclusion, The Alliance has a long, rich history of having legal language in our contracts that protects self-funded employers from hospital consolidation. We talk to providers about how consolidation will affect our employers and their communities, and – driven by our core tenant of transparency – we share that information with employers.

Although the pandemic has increased the speed and magnitude at which hospital consolidation happens, The Alliance has been aware of it for quite some time. We’ve seen our fair share of mergers since 1990, and whether by renegotiating better rates or keeping them on separate contracts (because the consolidation wouldn’t be to our employers’ benefit), we create unique contract provisions to protect our employers from the fallout of hospital consolidation.

To learn more about how to protect your business against rising health care costs, please contact our Business Development team.

As Americans, we generally utilize health care services at the same frequency and intensity as other developed countries, yet we continually pay more. A lot more.

My friend and colleague, Cheryl DeMars, President and CEO of The Alliance, has been quoted publicly quite a few times on price transparency and the rapid inflation of health care costs. That’s because health care inflation has climbed to a significantly higher level in comparison to other forms of inflation, and that disparity will continue to grow if we let it happen.

The best way to close this gap is to attack high prices; The Health Care Cost Institute found that increased prices accounted for 75% of health care cost inflation from 2014-2018. So how do we reduce high prices? That answer begins with tying those prices to an external benchmark. To quote Cheryl once again, “You can’t manage what you can’t measure.”

Specifically, benchmarking prices as a percent of Medicare – which is designed to cover hospitals’ variable costs and overhead at a standard rate – is becoming increasingly common among group purchasers. But not all approaches are created equal, so let’s take a deep dive into the different methodologies, including ours – Reference-Based Contracting by The Alliance®.
Reference-based benefits (RBB)
Reference-based benefit models set a maximum allowed amount for specific elective procedures. In other words, the health plan sets a threshold benefit for a procedure, finds providers willing to accept that price, then steers employees to those providers.

The best-known example of this strategy came in 2011 when the self-insured California Public Employees’ Retirement System (CalPERS) set a $30,000 maximum benefit for joint replacements for its employees. They saved $2.8 million (or $7,000 per patient) in a single year using this strategy.

So why isn’t everybody doing this? For starters, it requires a heavy administrative burden on the health plan. They must research the cost for specific procedures at different area providers (which, as Dr. Marty Makary recently explained, is not an easy task). Then, they must decide on an acceptable benefit threshold and get enough providers to agree to it for the strategy to make sense.

A secondary hurdle to the RBB strategy is that it requires vigilant employees who are highly engaged in their health benefits. If a single patient receives a procedure at a provider without the RBB agreement in place, its cost could prove catastrophic to the health plan.
Reference-based pricing (RBP)
Reference-based pricing, (or simply reference pricing,) is a pricing strategy where vendors partner with employers to reprice claims at a percent of Medicare without any provider agreements in place. (In some cases, health plans create “handshake” agreements for one-off procedures.)

Providers can then either accept the repriced claim or not; without a contract in place, providers might balance bill the patient for the remaining portion of the payment. From there, the patient is advised not to pay the charge. Instead, the RBP vendor will negotiate with the provider in an attempt to settle on a new, lower charge or to drop it altogether.

However, there are some obvious issues with the reference-based pricing strategy:

It requires well-informed and engaged patients: If and when the patient is balance billed, they need to have the education and resources to understand how to best move forward.
The patient risks unanticipated bills: If the patient does not pay their balance bill and the vendor and provider cannot reach a settlement, the patient is liable for the charge and can be taken to court for the remaining chargemaster price. Additionally, their credit score could be affected if their unpaid bill goes to collections.
Lower provider access: The provider may simply choose to refuse servicing patients under a reference-based pricing model, and depending on the region, growing provider consolidation can further reduce the plan’s leverage to negotiate with the provider.

Reference-Based Contracting by The Alliance®
Reference-Based Contracting, as it suggests, uses actual contract agreements for specific procedures based on a percent of Medicare – the single largest purchaser of health care in the US. Medicare is used because it has established base rates for various services, and they adjust those rates by provider to factor in geography, patient mix, and quality metrics.

Reference-Based Contracting by The Alliance provides the baseline we need to pay a fair price for services, rather than simply focusing on a savings of total charges. Paying providers a percent of Medicare offers an appropriate benchmark to measure relative value. At the same time, it enables employers to use Benefit Plan Design to incentivize employees to utilize low-cost, high-quality providers.

Additionally, Reference-Based Contracting protects our members and their employees from unexpected charges and helps employers predict future health care costs. Our strength in numbers allows us to pursue payment reform using these unique contract provisions, and now, The Alliance uses this purchasing method with over 85% of contracted providers.

Our core philosophy on Payment Reform is simple: by aligning incentives, we can improve quality of care, expand access to high-value care, and reduce the cost of care for both employers and their employees – and it all starts with benchmarking prices.

Interested in shifting your workforce’s care to contracts based on a percent of Medicare? Contact our Business Development team.

The National Alliance of Healthcare Purchaser Coalitions (NAHPC) hosted a great webinar detailing the rights and responsibilities of Plan Sponsors as fiduciaries. To help better educate our members on this important topic, we’ve summarized our key takeaways for you, below. 
Who Is a Fiduciary? 
Anyone who exercises discretion or decision-making over plan assets is a fiduciary – almost always the Plan Sponsor and the Claims Administrator. Typically, fiduciary roles are named in the Administrative Services Only (ASO) agreement. Here are the most common: 

C-Suite (CEOs, CFOs, COOs, etc.)
Board Members
VPs of HR
Benefit Administrators. 

Benefit Consultants are not fiduciaries, nor generally are Service Providers in self-insured plans. TPA, PBM, and carrier contracts often stipulate they are not fiduciaries. Plan Sponsors bear the burden of Employee Retirement Income Security Act (ERISA) compliance and cannot delegate their responsibilities away, regardless of what the contract stipulates; Plan Sponsors are responsible for their vendor choices. 
What It Means to Be a Fiduciary 
A fiduciary acts on the behalf of others, putting their interests above of their own, with a duty to preserve good faith and trust. A fiduciary is bound both legally and ethically to act in their clients’ best interests. 

ERISA requires fiduciaries to discharge their duties:  

For the exclusive benefit of plan & participants 
Using the skills of a prudent person
In accordance with the plan’s documents

The Exclusive Benefit Rule stipulates a fiduciary owns the responsibility to ensure all plan funds and assets are spent in the best interest of the plan beneficiaries. In other words, as a fiduciary, the Plan Sponsor needs to know where every single cent was spent. Violations of the Exclusive Benefit Rule can include: 

Fraud, waste, and abuse
Negligent claim adjudication (cross-plan offsetting, upcoding, unbundling of claims)
Sub-agreements the Plan Sponsor may be unaware of 

It’s essential to read, understand, and follow your plan’s documents. If you engage in discussion with your TPA or Benefit Administrator about adjudicating claims in a particular manner, their defense will always be “we followed the plan’s documents.” 
The Consequences of Breaching Fiduciary Duty 
As a fiduciary, you do not necessarily have protection from the plan sponsor – you have personal liability to restore any losses to the plan. Therefore, fiduciaries are advised to obtain some form of umbrella insurance to protect their liability. 

Personal liability to restore any losses to the plan resulting from their actions, or inaction can include: 

20% penalty assessed by the Department of Labor
Removal from fiduciary status 
Possible criminal penalties

 How The Alliance Helps Protect Fiduciaries 
If you self-fund with The Alliance, you’re already protecting your plan participants from balance billing. Our contracts stipulate that members are not liable beyond their contractual amounts and your employees are protected by maximum allowable amounts. 

Further, our contracts allow employers to “steer” or guide employees to high-value health care options – like Direct Primary Care – emphasizing value over volume. As a fiduciary it is your responsibility to provide these options to your employees, because simply offsetting the costs to the plan member isn’t responsible. 

Our agreements don’t limit employers to using a single health system, and those that do can force employers into paying significantly higher costs for the same procedure. And if that employer chooses a less expensive provider than one outlined in their health plan agreement? They are likely in violation of that agreement and the contract becomes null and void, meaning they no longer enjoy its protections.  

Lastly, employers who self-fund with The Alliance have access to their data, which is incredibly valuable in terms of fiduciary responsibility. As a fiduciary, you must manage the expenses of the self-funded plan to the lowest-cost, highest-quality providers. You should not defer the management of the plan to your TPA or broker when managing the plan because there’s no way to know if your TPA or broker really has your best interests at heart. Nobody will look at cost quite like you, and we can help you do that by taking a deep dive into your data. 
Best Practices to Limit Fiduciary Risk  
Many health plans don’t necessarily have those provisions in their contracts, but The Department of Labor has issued Fiduciary responsibility guidance under group health plans, and within it, they lay out some good examples of proper fiduciary duty: 

Handle employee “contributions” in a timely and efficient manner.
Medical Loss Ratio considerations
Minimizing fees
Monitoring service providers
Maintaining plan’s benefit claims procedures
Meeting disclosure and information requirements
Preventing prohibited transactions

Additionally, fiduciaries should follow a three-part checklist to protect their fiduciary liability: 

Have and follow a documented process– Typically, Claims Administrators are selected through a Request for Proposal (RFP) process, but is that process ever revisited? What was the criteria used to select your TPA or Claims Administrator and was it simply that they were the cheapest or had the largest network? These are all good questions to ask. 

Understand what you’ve agreed to in your existing plan documents– If you’ve signed something, do you know what you signed? Do you know if any other agreements exist? What you don’t know can hurt you. 

Establish a program to reconcile your health plan expenditures – Did all the money the plan paid out that you think went to claims go to providers? Transparency is revealing massive financial risk for Plan Sponsors; your agreements can be used against you through contract language, the complexity of 3rd party agreements, and withholding of data. As a fiduciary, you need to see all of your agreements and understand them before signing them. 

The 2019 ERISA case of Acosta v. District of Columbia provides a roadmap to navigating fiduciary obligations for health plans. It states that the duty of fiduciaries to monitor requires review at reasonable intervals and includes:  

Review the selection of TPAs
Monitor service providers
Renegotiate plan benefits
Require outside audits (by their choice of auditor)
Monitor administrative and claims procedures 

Fiduciary protection is often overlooked, and as transparency rules emerge in health care billing, data, and hidden fees in your contracts, those changes may impact how your plan assets are being spent and could violate the Exclusive Benefit Rule. 

Health plan fees must be monitored, and a good fiduciary process is always the principal defense to fiduciary imprudence claims. 

Plan Sponsors bear the risk of and have a significant obligation to ERISA compliance. They should investigate this risk with their benefit consultants to understand their exposure and establish a process for fiduciary protection. 

If you self-fund and want help limiting your risks as a fiduciary, contact us.  




In order to better understand Payment Reform strategies and how they can positively influence health care purchasing, let’s begin by explaining how health care is typically delivered. On a basic level, the traditional health care model utilizes a fee-for-service payment methodology where physicians are paid based upon the quantity of patient treatments and referrals, which means there’s a fixed focus on volume – not value – of services provided.
The Fee-for-Service Problem 
The problem with fee-for-service payments is they can possibly conflict with the physician’s sense of duty in providing treatment options that are in the best interest of the patient; what’s minimally necessary (and minimally invasive) may not always coincide with producing a profit.  

Additionally, fee-for-service makes it nearly impossible to understand the price of a procedure – which can vary wildly between different providers – and the quality of services rendered. There is no correlation between cost and quality, so the adage “you get what you pay for,” isn’t applicable to buying health care.
How Are Alternative Payments Better?
Payment Reform strategies then, can be described as implementing an alternative payment model that aligns financial incentives with that of the patient’s. In other words, these non-traditional payment methods intend to “free” the provider to give the truest, most accurate care for the patient because it benefits both parties.  

The “win-win” situation that a performance-based model of payment creates is why Payment Reform is a core driver of The Alliance in delivering High-Value Health Care to employers and their employees, and we’re executing Payment Reform on two fronts: inconsistencies in price and quality measurement. 
The Alliance’s Payment Reform Strategies
Reference-Based Contracting by The Alliance

In regards to price, it’s important to set a benchmark for purchasers to compare costs between different providers. In our CEO’s words, “you can’t manage what you can’t measure.” 

That’s why The Alliance uses Reference-Based Contracting – which standardizes prices based on a percentage of Medicare – in over 80% of our contracts. This price transparency enhancement not only allows the health care consumer to make smarter decisions, but it also produces a more competitive market in terms of price. 

Bundled Services

The Alliance contracts with multiple providers who have agreed to bundle common surgeries and tests into a single, manageable price. These services typically require various medical personnel and equipment to treat the patient, and consequently, are billed as separate line items which make it difficult to compare prices between providers. Bundled pricing packages all of those services into one comparable price – which helps defend against surprise billing. 


Of course, Payment Reform is more than just about dollars. It’s just as important to measure the quality of the treatment as it is the price, which is the idea behind our QualityPath program –  to help patients find high-quality doctors, hospitals, and clinics for select surgeries and tests. 

 Whether it’s an MRI or CT scan, or a total hip or knee replacement, QualityPath enables consumers to receive higher quality care at a better price with a guarantee; all patients receive a warranty on their care if it results in further treatment due to complications. This program raises the bar on quality, and forces providers to share the burden associated with the cost of these procedures. 

Alternative Payments Based on Capitation

The Alliance strives for a future where all health care is bought and paid for through methods that are simple, transparent, and predictable – a fixed price based on the amount and/or risk of enrollees using a per person, per period-of-time fee schedule. 

 This payment method not only advocates for better price transparency, but because a patient pays their share regardless if they used the care or not, they’re more inclined to seek care when they believe they need it. In doing so, this model controls both cost and health outcomes, because as more patients seek primary-level care sooner, they rely less on expensive (and invasive) surgeries, specialists, and ER visits.  Our new Direct Primary Care clinic will use a capitation-like payment method, where employers pay a monthly payment per patient, but only if that patient uses its services. 

If you want to learn more about how utilizing Payment Reform strategies, like alternative payment methods, can work in your favor – contact your Account Executive. 


In the past few weeks, we’ve been featuring blogs that break down in greater detail the four core drivers on our roadmap to high-value health care unveiled at our annual meeting this year. Today, we take an in-depth look into the third driver, provider network design, and how it fits into the larger picture of high-value health care.

The Alliance is recognized in the markets it serves as an employer coalition with deep expertise in self-funding and a focus on data analytics and cost and quality measurement. More importantly, The Alliance delivers a high-performing provider network that employers can use as a platform for benefit plan design and innovation.  The Alliance contracts directly with providers on behalf of employers to ensure high-quality, convenient, and cost-effective access to care for employees and their families.  Our provider network has evolved and will continue to evolve to meet the needs of employers.
Pushing Boundaries and Options
In an era where provider networks are getting smaller, our provider network is continually expanding to give employees and their families more options for care. In the past five years alone, we have grown to serve about 30 more counties than we did in 2014, reaching further North and East into Michigan, west into Minnesota and South into Illinois. We are continually monitoring where patients are seeking care and adjusting our network accordingly to help our members avoid expensive out-of-network care.

We have also partnered with Trilogy Health Networks to provide our members with services at hospitals and doctor offices that are not part of our primary network. Plus, we are growing strategically to add doctors and hospitals in new markets where our members have worksites and where we might serve additional prospective employers. Our growth helps our members’ expanding businesses but also allows us to increase our leverage in the markets we serve by serving more employers.

These initiatives go hand in hand with our efforts to change how we pay providers (core driver two, payment reform, featured in our last blog) and our focus on advanced primary care, often delivered through shared-site clinics. Employers have utilized these tools to reduce their overall health care spend while employees are better served by primary care clinicians that can spend more time with them.

In other words, we don’t believe that employers must give up on reducing costs to offer enrollees a broader choice of high-quality, high-value providers. Our solutions allow employers to drive down the total cost of care by aligning incentives and customizing networks regionally to maximize employers’ investments in health benefits. That’s how we work to control costs and add value even while we are expanding our network and our offerings.
What Can Employers Do?
If you are interested in advanced primary care, our provider network expansions, or our four core drivers of health care, please reach out to the Member Service Team. To learn more about how The Alliance works with employers to make health care more affordable, contact our Business Development team.

At The Alliance 2019 Annual meeting earlier this year, we talked about the four core drivers on our roadmap to high-value health care. This blog takes a more in-depth look into the second driver, payment reform, and why it is a central piece of the work and mission of The Alliance.

Many businesses have financial incentives built into their contracts that allow them to reward good business partners when they exceed expectations and pay less for services that aren’t meeting expectations. Aligning financial incentives to reward providers for high-quality care isn’t as straightforward.

Health care providers aren’t viewed as service providers, which is understandable. Health care is more than a business transaction. The culture of health care delivery has been opaque and unpredictable. And traditionally, 100% of the risk has been on purchasers. That means employers, as purchasers, have paid for waste and mistakes, even when the health care provider is at fault. This long-established history makes payment reform complicated but necessary.
The Alliance Contracting Philosophy
Achieving payment reform by creating the right incentives for care delivery is the platform upon which The Alliance was built. We’ve used our strength in numbers to pursue unique contract provisions that protected our members and their employees from unexpected charges. And we are building on that foundation to include a focus on cost and quality transparency (our first core driver) to continue the payment evolution.

Over five years ago, The Alliance launched QualityPath® as a high-value health care option for our members and offered bundled payments for a select set of services. We continue to grow these two programs, which reassure our members that they understand the prices of the care they are receiving and that it is comprehensive and coordinated.

Now, we are starting to implement contracts that use Medicare-based pricing. Medicare, the largest purchaser of health care in the US, has done the work to establish the base rates for various services and then adjust them by provider to factor in geography, patient mix, and quality metrics. Medicare-based pricing gives us the benchmark needed to pay a fair price for services, rather than focusing on a savings of total charges. Paying providers a certain percentage of Medicare not only gives us an appropriate benchmark by which we can measure relative value, it also enables employers to use plan design (another one of our four core drivers that will be featured in an upcoming blog) to incentivize employees to use lower-cost, higher-quality providers.

These efforts are moving us away from the fee-for-service model toward what is called “Total Cost of Care” contracting. In a Total Cost of Care (TCOC) model, 100% of the care provided to a patient, or a group of patients, is considered when analyzing reimbursements. That includes hospital plus non-hospital, initial versus follow-up care – quite literally all the care delivered. We are moving this direction because it will help us identify patterns of overuse and inefficiencies in the health care system that remain hidden in a fee-for-service model. It also moves the risk traditionally born by employers for inefficient care or medical errors to health systems. Its promise is to identify cost saving opportunities by system so we can reward provider partners that deliver the most cost-effective care to our employees and their families.
What Can Employers Do?
Employers that join together, like those that are members of The Alliance, can use their collective bargaining power to influence the change in health care that employers want. The Alliance’s solutions, like bundled payments, QualityPath©, and Medicare-based pricing, are customizable to each of our member-employers’ circumstances and their appetite for achieving cost savings. Members and their advisors are encouraged to contact their Member Service Team to learn more about our efforts toward cost transparency, predictability, and control.