What To Know About Third Party Administrator Services

When you’re considering switching to a self-insured Workers’ Compensation program or maybe a large deductible, it’s important to think about a third-party administrator, also known as TPA services, as part of an overall risk management strategy.

TPAs, which are independent companies, play a large part in Workers’ Comp by keeping up on claims and data tends, offering litigation management services and medical billing reviews, and working for both the insurer and employer to process insurance claims and oversee payouts efficiently.

Third-Party Administrator Contract Options

  1. Budget Based: These are usually costlier than the other two options, but are often chosen by larger employers due to their ability to offer more services and handle complicated claims.
  2. Life of Claim: With this contract, the TPA typically handles claims from beginning to end, even if the employer/TPA relationship is severed. 
  3. Life of Contract: As the more common agreement, this type of contract can work well for self-insured larger employers. There is a fixed per-claim cost agreement between the employer and the TPA, and it is usually the least costly of the three types of contracts.

Finally, before choosing between TPA services, it’s a good idea to take a look at the financial variables and consider your long-term strategies and objectives.