September 17, 2019 — Blog
Select TPAs That Meet These Criteria
Third party administrators (TPAs) provide a critical service to plan sponsors which explains their growing numbers and rising revenues. In its “Third-Party Administrators & Insurance Claims Adjusters Industry in the U.S. – Market Research Report, July 2019,” IBISWorld projected 2019 industry revenues of $256 billion and the industry’s annual growth rate of 4.7% from 2014-2019. The report cites 137,944 businesses in the sector. That said, not all TPAs are alike both in terms of their offerings and service quality. When selecting a TPA, plan sponsors should carefully consider these key criteria:
–Robust TPA products/services: TPAs that can offer a comprehensive suite of services will be a strong resource to plan sponsors. In addition to offering health, dental and disability claims processing, seek out TPAs that also can provide support in areas of pension and annuity administration, health and welfare fund administration, and payroll auditing. Moreover, the TPA should offer aligned products and services such as utilization management and medical stop loss.
–Advanced TPA technologies: A TPA’s deployment of state-of-the-art technologies is critical. These technologies should include a fully-automated claims processing system that efficiently manages claims adjudication, medical pre-determination, alternate benefit provision, multiple PPOs, COB, duplicate identification, clinical edits, patient notes, void/refund processing and letter issuance and follow-ups, among other tasks. Other important technologies that should be in place are: an image system to capture and store health and welfare claims and ensure HIPAA-compliant electronic data interchange; an automated workflow system for efficient handling of claims, reason assessments, inventory control and reporting; and a web-based customer service tracking, inquiry and documentation system.
–Effective TPA processes: The TPA should demonstrate high quality processes such as those that promote careful review of medical bills and carriers’ explanation of benefits to ensure that plan participants are not paying more than their insurance company would pay.
–TPA Staff continuing education and training to ensure that the TPA’s personnel are up-to-date on all of the latest regulations, as well as the company’s internal policies and procedures.
–Proven track record for high quality customer service as evidenced by longstanding clients, regular benchmarking of customer service calls, offering of bi-lingual customer service personnel, provision of plan member-friendly documents and communications.
–Fiscal stability and integrity as demonstrated by the company’s good standing within the broader financial services and insurance industry.
By evaluating a potential TPA partner using this checklist, plan sponsors can confidently enter into a relationship that will deliver extra value to plan members and greater peace of mind to plan sponsors in knowing that their employee benefit plans are being managed responsibly, efficiently and in full compliance.