We work with many third-party administrators, and it’s always vital to choose the right one. From their end, it’s equally important to be able to maintain a healthy and successful TPA organization, so when they are hired to assist a business, they can be at their very best. Here are some tips on how to build and maintain a successful third party administrator.
What is a Third Party Administrator?
A third-party administrator is an organization contracted by another company to do operational and/or administrative work for them. They are an entity that will do things like claims processing, employee benefits management, and other day-to-day activities.
A TPA may take part in all steps in the health plan workflow. They may frequently be involved with designing a health plan, the implementation, and then the ongoing administrative duties post-launch. They are a critical part of the health insurance world to help streamline services while also saving insurance providers money on operational costs.
Who do TPAs Help?
As TPA’s roles and tasks continue to grow, more and more businesses are opting to utilize TPAs for outsourcing day-to-day work that can be costly in-house. However, they are prominently used within the healthcare industry, especially with insurance providers — dealing with benefits enrollment and medical claims processing.
Businesses looking to outsource administrative duties within claims processing or benefits enrollment may first look to a third-party administrator. TPAs bring a level of expertise into a business that can save a ton of time and money by not training in-house. TPAs will know how to implement their seamless workflows within existing operations thanks to their experience and knowledge.
Qualifying to Become a Third Party Administrator
Because third party administrators handle very sensitive documents in the health care industry, they need to meet and maintain certain requirements and licensing to stay in business. Most states have different laws regarding TPA requirements, but a TPA must meet a few basic qualifications.
Many TPAs have grown into huge corporations and are widely used throughout the nation. Places like Sedgwick Claims Mgmt and Crawford & Co. They meet the majority of the requirements right tout the gate. TPAs who are much smaller in size or even independent contractors must immediately have a business contact person, phone number, and a physical address in some states.
A legitimate TPA will be labeled TPA certified, meaning they have gone through training and testing to become certified as a third party administrator. This would be similar to any other administrative position in health care where TPAs must prove they know about HIPAA compliance, data security, and other topics that ensure confidential patient information stays safe.
TPA can go to any of the following to gain certified administrator designation; FMLA, ADA, COBRA, HR Training, HIPAA.
The Pros and Cons of Becoming a TPA
The pros of starting or working for a third party administrator is that it is an industry that only continues to grow. Getting into third party administration can be a great way to get involved across many different platforms and industries. It’s definitely a stepping stone to great things in the health care industry.
Some cons of TPAs include keeping up with the ever-changing healthcare guidelines each year. Certifications and licensing can change periodically, and one missed step could be critical to the business. It can also be difficult having to rely heavily on whether or not an organization continues its relationship with you. Organizations that decide to restructure or cut-costs or even move their administrative duties in-house could jeopardize a third-party administrator and lose a large chunk of revenue when those things happen.
What to Avoid in Your TPA Organization
A few things that organizations have voiced grievances with when it comes to their TPA include inefficiencies, miscommunication, and clashing results. As a TPA, it is your job to ensure that you fulfill all promises for the organization that hired you. They hired you for a reason, which was to outsource activities to you to save time and money in-house. If your work starts to show inefficiencies or untimeliness, that’s a big red flag to many organizations.
Also, solidify your workflows so that they coincide with those of the organization you are working with. Any break in the chain can lead to miscommunication, sharing misinformation, or even security breaches. Continuing education and keeping certifications up to date can help immensely.
At Smart Data Solutions, we know the ins and outs of working with and for different industry vendors. We’ve seen and done it all and have successfully implemented a workflow that supports our clients — not hinders them. Our experienced team can relate to the struggles a third-party administrator can face and how to avoid them. For more information and resources, feel free to contact us at (651) 894-6400.