Large employer groups, unions, associations, and other plan sponsors are all looking for ways to minimize healthcare costs. Historically, one way is to self-fund to keep the administrative costs low and allow for customization of benefits offered. One of the ripple effects of the Affordable Care Act is that smaller groups are investigating self-funding as well. When groups self-fund, they commonly turn to third-party administrators to provide the services and expertise needed to establish and maintain the plan.
Third-party administrators and cost management experts work on behalf of employers and other groups to keep claims costs low. In addition to reporting on claims, eligibility, utilization, and other dimensions to help employers manage costs, they also aggregate and manage networks.Using supplemental networks can extend healthcare benefits to employees who don’t work in centralized locations and improve employee morale.
In 2013, Business Insurance ranked the largest TPAs that specialize in employee benefits. The top five were:
Third-party administrators commonly re-price claims by recalculating billed medical charges based on the rates and rules a PPO has negotiated with supplemental networks. They also directly negotiate with providers to ensure that all claims are discounted. These networks are often a combination of risk and non-risk PPOs, depending on the plans that are being offered to the group’s members. When there is a combination, it is important to make sure that all providers are properly contracted to offer discounts to members.
Another way that TPAs factor into the changing network landscape is to provide the claims administration, eligibility management, and other back office functions hospitals and health systems need when they start to sell to groups and individuals. This has become an important service in removing the barriers for new entrants into the healthcare market.
How can you leverage your TPA relationships to expand your sales and/or network reach?