The Role of a Third Party Administrator
A third party administrator processes insurance claims and delivers services on behalf of a health insurance plan. Third party administrators are called TPAs and are most often used with self-insured health plans for organizations that want to save costs by self-insuring, but not necessarily do the work that comes along with these savings. This is where TPAs come in, to help with the management, health insurance claims repricing, and design of a health plan. Read the following to find out more about third party administrator healthcare and the role of a third-party administrator.
Duties Performed by a TPA
Third party administrator healthcare agents provide operational services such as claims processing and employee benefits while under contract with another company. The organization is responsible for processing claims from hospitals, doctors, and pharmacies while staying in compliance with federal regulations. A TPA is appointed by the insurer, but are not responsible for the acceptance or rejection of claims.
Self-Funded Insurance Group Health Plans
In a self-funded insurance group health plan, an employer pays for employees’ health care claims following the terms of the plan. Employers will set up a trust fund for corporate and employee contributions, which in turn pays the claims. A third-party administrator will manage this plan. In contrast, a fully insured plan involves the employer and employees paying the insurers directly, which pays group health providers based in terms of the plan. An employer who decides to go with a self-insured plan must have the financial resources to back the obligation of healthcare service, and a TPA can help organize this structure.
Prediabetes and Disease Management
Prediabetes is a growing concern in the workforce, with most who have it developing Type 2 diabetes within 5 years. Roughly 2 million children aged 12 to 19 have a pre-diabetic condition linked to obesity and inactivity which puts them at risk for full-blown diabetes and cardiovascular problems, government data suggests. Many adults with this condition do not even know they have it, which can be a concern for employers who have decided to have a self-funded insurance plan. TPAs can assist with sorting out issues with not only prediabetes but other areas of disease and care management. Self-insured employers set goals for third party administrator healthcare agents to reduce costs, improve communication with employees, and identify those who may be future high-risk members.
Third party administrator healthcare agents provide valuable client services to self-insured businesses, ensuring the essential healthcare concerns of employees are met. As a middle-man between the insurance agencies and businesses, these organizations assist businesses who want to remain self-insured and autonomous.