Selecting the Right TPA: A Guide for Self-Funded Health Plans

In a recent poll, we asked “What do you believe is the most important component of a high-performing health insurance plan?”

The winning answer? An efficient TPA.

For an employer offering a self-funded health plan, selecting the right third-party claims administrator (TPA) is a very important step.

The TPA ensures efficient and effective management of your health plan.

Here are the key functions and responsibilities of a TPA:

#1: Claims Processing

TPAs receive medical claims from healthcare providers on behalf of the employees covered under your health plan.

They evaluate and process these claims according to your health plan’s terms and conditions. This includes verifying eligibility, ensuring the claim meets plan requirements, and determining the payment amount.

TPAs handle the payment process, ensuring that providers are paid accurately and timely.

#2: Customer Service

TPAs provide support to plan members, answering questions about coverage, claims status, benefits, and more.

They assist you, the employer, with plan management, providing insights, resolving issues, and offering guidance on plan design and administration.

#3: Cost Containment

TPAs often negotiate discounts with healthcare providers and networks to reduce costs for your health plan.

They review the necessity and appropriateness of medical services to prevent overuse and ensure cost-effectiveness.

For complex or high-cost cases, TPAs may provide case management services to coordinate care and manage expenses.

#4: Compliance Support:

TPAs ensure that your health plan complies with all relevant federal and state regulations, including HIPAA, ACA, ERISA, and others.

They assist in creating and maintaining plan documents, summary plan descriptions (SPDs), and other necessary documentation.

And more! TPAs enable employers to offer self-funded health plans without needing to manage the complex administrative, regulatory, and operational tasks internally.

Choosing the wrong TPA can have a costly impact on your health insurance plan.

They should have extensive experience in managing self-funded health plans and have a deep understanding of the regulatory environment and industry best practices.

Here are the most important factors to consider:

Claims: The TPA should have robust and efficient claims processing systems. Look for metrics such as turnaround times, accuracy rates, and the technology used for claims processing.

Cost-Containment: The TPA should have effective cost containment strategies, such as negotiated discounts with healthcare providers, utilization review, and case management services.

Support: The TPA should provide reliable and accessible support to both the employer and employees.

Reporting: The TPA should offer comprehensive reporting and analytics capabilities to provide insights into plan performance, cost drivers, and utilization trends.

Compliance: The TPA must stay current with healthcare laws and regulations and ensure the health plan complies with all legal requirements.

Reputation: The TPA should have a solid reputation in the industry and provide references from other clients who can attest to their performance.

By considering these factors, you can select one that will help manage your health plan effectively, ensuring both cost control and employee satisfaction.

If you need help vetting a TPA, don’t hesitate to reach out!