Savvy employers and their advisers know that workers compensation third-party administrators require constant oversight to ensure optimal claims outcomes and expense management. In addition to managing their TPA's claims handling, employers must scrutinize contracts for the TPA's managed-care pricing practices that could include obscure fees. To manage their TPA's claims handling, experienced workers comp managers apply various strategies that even have included placing the employer's own claims supervisors in their TPA's offices or creating desk space so their TPA's adjusters can work in the employer's offices. Such employer measures can meet TPA resistance, though they may be welcomed because of the opportunity to form a tighter partnership. ›› More

Employers, consultants and brokers say workers compensation third-party administrators are evasive about fees they earn from managed care companies and other vendors they contract with to provide an array of claims services. The fees create a conflict of interest because TPAs may take customers' business to a vendor providing the TPA greater compensation to service an account, rather than selecting vendors for their ability to meet clients' specific needs. TPAs maintain they disclose all revenue they earn from vendors, but large employers often compare the lack of transparency to the controversial broker contingent commission issue. ›› More

Employers worry that ongoing consolidation among third-party administrators that they contract with to manage workers compensation claims means less competition for their business. TPAs say their acquisitions will bring better management and technology to their industry, which will mean improved customer service and lower costs. But as employers see increasingly larger organizations gobble up some their favored TPA partners, they wonder whether it just means they will have fewer alternatives should service suffer. Factors driving consolidation in the TPA sector include economic conditions making it difficult for TPAs to increase revenue organically. ›› More

An ongoing legal debate over whether laws require insurers and third party administrators to provide adjusters overtime pay stands to impact how much employers pay for claims management, the quality of that service and claims outcomes. Those are big concerns for employers, and California’s Supreme Court recently issued a decision that will help guide other courts on how to rule on whether adjusters are exempt from laws requiring overtime pay. ›› More

Some large and regional employers prefer to unbundle managed care services from their workers compensation third-party administrator contracts. Such employers say that they get better claims outcomes though such an approach, and they also are able to avoid any hidden fees TPAs may receive for taking a client's account to a particular vendor. Most large self-insured companies procure their workers comp managed care services through their TPAs, and unbundling requires significant in-house resources. But brokers and consultants say that they see more clients asking about the option of unbundling services such as bill review, utilization review and preferred provider networks. ›› More

There are fewer workers compensation third-party administrators for employers to turn to, but one way to bring out the competitive nature among the choices employers do have is to obtain quotes for separate managed care services. Getting quotes for the cost of unbundled managed care services can give TPA's something to consider when they provide their price for including those services in their offerings. ›› More

Employers rightly expect a lot from their workers compensation third-party administrators, and TPAs don't want to disappoint their clients. But clients also need to understand what their TPAs need from them in order to ensure a smooth partnership, one in which claims are handled optimally and are managed with little disruption when things do go wrong. That starts with employers understanding their own needs and then continually communicating their goals and objectives to their vendor. Clients can also benefit from understanding how their TPA programs work and how they are charged for them. ›› More

Some employers are content to turn their workers compensation claims over to a third-party administrator without ever managing the TPA's performance. But a panel of veteran risk managers working for large corporations say that strategy is a mistake that will lead to worse claims outcomes. Rather that passively accepting their TPA's protocols, they insist upon having their own claims management protocols implemented, and they always work to ensure their vendors are doing everything possible to close claims. ›› More

Questionable charges for bill review services have gained attention as rising medical costs drive more employers to scrutinize their workers compensation claims expenses. But the billing statements employers receive from their vendors can be convoluted, making it hard to tell precisely what they are paying for. Some issues to sort out include whether a vendor charges a percentage of savings for services or whether they charge on a per-line basis or per-bill. Other factors for employers to evaluate are their average cost per bill and their average savings per bill. Software models can help employers sort it out. ›› More

Employer oversight of their workers compensation third-party administrator's claims management routines can very greatly, with a variety of practices aiding such oversight. But not having a strategy for supervising TPA adjuster work is a mistake, say veteran risk managers. Some TPA executives say employers are more interested in getting measurable results from their TPAs than expending resources to look over the vendor's shoulders. But the risk managers say staying engaged with their TPA adjusters is the only way to obtain desired results. ›› More

Scrimping on workers compensation claims management expenses can be penny wise and pound foolish if it means that too few adjusters will be left to handle too large a case load. To help keep claims outcomes from suffering, risk managers say they limit the number of files each third-party administrator adjuster working on their account can manage at any one time. But doing so requires them to pay for extra adjusters, which may drive up their immediate expenses, but reduce costs over the long term. How many claims each TPA adjuster should manage can depend on factors such as the jurisdiction where claims are filed. ›› More

When it comes to a tough workers compensation claim, it is better to find new strategies for closing it than to get bogged down discussing what has already been tried. That is why one risk manager doesn’t like the term “claims reviews.” She doesn’t want to review what her claims managers have already done, so she calls the meetings “strategy sessions.” ›› More

Fred O. Pachón, Business Insurance's 2009 Risk Manager of the Year, has a creative approach to ensure that the third-party administrator managing claims for his employer, Select Staffing Inc., stays on top of its game. Mr. Pachón employs what he calls “claims quarterbacks.” The senior claims supervisors are his employees, but they report to work at an ESIS Inc. office where the TPA's claims adjusters manage Select Staffing's claims. The quarterbacks are in a unique position to report to Mr. Pachón on any claims encountering additional challenges, and they can help the TPA's adjusters find solutions. ›› More

Nurse case managers are among the resources third-party administrators can introduce to help ensure workers compensation claims close as quickly as possible. Some employers, however, prefer to purchase nurse case management separately from their TPA claims management services. Either way, getting the optimal claims results requires knowing which type of claims will benefit from a nurse's attention and when to bring in such specialists. While nurse case managers are not necessary for all claims, when called for they can help achieve cost reductions from a speedier worker recovery, less litigation and improved return-to-work outcomes. ›› More

Employers can partner with their workers compensation third-party administrators to develop benchmarks the TPA must meet to satisfy the employer's expectations. Employers can also hire brokers or consultants to help them with that process. Another practice that helps ensure employers get the service and results they want is performing claims reviews. The review process can reveal much about a TPA's attention to service and its efforts to comply with an employer's requested claims practices. External audits also can provide a picture of the TPA's attention to issues such as regulatory compliance and client instructions. ›› More

While some employers maintain that they get better workers compensation managed care services by unbundling those services from their third-party administrator claims management contracts, others find advantages in keeping them bundled with their TPA service purchases. According to a panel of speakers, employers can get quality programs producing positive return-to-work outcomes whether they bundle or unbundle. But some of the employers on the panel insist that unbundling services provides their injured employees with better focused medical attention, and it helps make them better risk managers, as they pay more attention to their program details. ›› More