Employers make important decisions regarding their workers’ compensation programs. One of these decisions is selecting the proper third-party administrator when there are self-insured or are in a position to select one. When making this determination, it is essential to review several factors and select the one that meets your standards.
Find the TPA with the Best Claim Handlers
Picking the correct third-party administrator should start with finding the one with the best claim handlers. When reviewing the panel of claim handlers, it is vital to understand if you will have “designated” handlers or they are “dedicated.:
- Designated claim handlers: These handlers will handle all of your claims, and files from other clients; or
- Dedicated claim handlers: In this instance, a claim handler will only handle files from your company.
In addition to these designations, it is crucial to understand other factors regarding their experience, training, and expertise. Central to this includes the following criteria for consideration:
- Claim In-Take Process: It is important to understand the process for claim in-take. This can include the various platforms the TPA uses to receive claims. Such platforms include web or app-based systems, telephonic, or paper. Some TPAs have redundant systems to report injuries.
- Claim Handler Caseload: It is crucial to understand the number of files a claim handler will work. This will tell the employer stakeholders a lot about the philosophies and practices of a TPA. If a claim handler is working too many files, they may not be responsive to the needs of injured employees and employer concerns.
- Claim Handler Support: Another area of inquiry needs to be in the support individual claim handlers receive when working claims. Red flags to look out for are teams where the claim handler does everything – including opening the mail. When a claim handler is spending their time on files, there will be delays in them being responsive to the needs of other external stakeholders.
Consideration of these factors is essential in evaluating a third-party administrator and the quality of services they provide. These factors and how they work as a team are essential to evaluate in the selection process.
Claim Management Services
Effective third-party administrators should have additional resources that allow a claim to move effectively from when it is open to settlement. The growing complexity of workers’ compensation law forces interested stakeholders to need additional services beyond handling the claim.
- Telephonic Nurse Triage Services: Nurse triage services are focused on ensuring an injured employee receives all reasonable and necessary medical care promptly. They can also assist in coordinating medical visits and watching out for waste and abuse in post-injury care.
- Medical Management Services: All medical management services should be performed through providers that are certified by the Utilization Review Accreditation Committee. These services can help improve performance metrics and get the employee back to work.
- Access to Medical Experts and Medical Director: Medicine has advanced exponentially since the inception of workers’ compensation programs in the early 1900s. All interested stakeholders should have access to a medical director who can assist the claim team in accessing accurate and complete medical information.
- Medicare Secondary Payer Compliance Services: Enforcement of the Medicare Secondary Payer Act requires stakeholders to know about and access a compliance team with medical, legal, and financial training. These professionals ensure that settlements are in compliance and prevent future adverse action by the Centers for Medicare and Medicaid Services.
- Attorney Panel: Having access to experienced defense attorneys before a claim being put in litigation is vital. It is important to know what law firms one has access to when one is needed.
Third-party administrators should also have access to diverse panels to provide other standard services such as surveillance and skip tracing.
The use of best-in-class claim management practices is also a sign of a great third-party administrator. It is important to determine if one has the following additional characteristics.
- Physical Office Location: Certain state insurance requirements demand a third-party administrator have a physical presence in the employer’s state. This is something that needs to be determined during the selection process.
- Use of Client Advisory Boards: These boards should meet regularly and provide feedback to the TPA.
- Frequency of File Reviews: Consideration should include the frequency of such meetings, the number of people involved, and where they occur. While in-person meetings are not required, they do help in promoting comradery.
It is also essential to get a feel for the dedication of a third-party administrator. If you want representatives to visit an office location or worksite, it is vital to understand this before committing.
The careful selection of a third-party administrator is vital to every workers’ compensation program. When a complete evaluation is performed, interested stakeholders can make the best decisions for their workers’ compensation programs, which promote efficiency and cost savings.
Author Michael Stack, CEO Amaxx LLC. He is an expert in workers’ compensation cost containment systems and helps employers reduce their workers’ comp costs by 20% to 50%. He works as a consultant to large and mid-market clients, is a co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is the founder & lead trainer of Amaxx Workers’ Comp Training Center, which offers the Certified Master of Workers’ Compensation national designation.
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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.