Providing health care benefits is a must for recruiting and retaining valuable employees in today's competitive labor environment. When an employer sets-up an ERISA self-funded plan, a critical team member is the third-party administrator (TPA). While the consistent performance of the TPA can enhance employee relations, performance failure on the part of the TPA can impact relations beyond the health plan.
We assist employers to assess the operations of their third party administrator. Our review encompasses benefit design and recent changes; eligibility procedures; medical loss ratio, utilization rates of medical services, and medical expense trends; claim accuracy, turn-around-time and auditing processes; large claim analysis and related stop-loss reinsurance coverage; provider network, reimbursement arrangements and access costs; actuarial reports; and administrative fees and commissions. Our objective is to provide the employer an independent analysis to identify and correct problems early.
TPA Selection and Implementation
The selection of the third party administrator should be a managed process that documents the decisions and improves the successful selection of this vital team player. We help by serving as project manager for the process. We conduct interviews with management and major stakeholders (e.g., the client's broker, union leadership) to identify the strengths and weaknesses of the current TPA. Using the information gained from the interviews, we develop the requirements for TPA services and work with management to identify evaluation criteria. From the requirements, we develop a request for proposal and solicit prospective companies. Following the receipt of proposals, we conduct an evaluation, lead management in the selection decision and the negotiation of the terms and conditions in the administrative agreement.
Once the contract has been awarded, we can provide project management for the implementation of the new TPA and run-out activities of the former TPA. We develop a detailed project plan working closely with the human resources department, the broker and the TPA management. We identify tasks, deadlines, resource availability and necessary courses of action to achieve a "Go Live" status. We manage the process, track task completion, conduct project team meetings and work with team members to identify problems and develop solutions.