The Third Party Administrators industry is a crowded one. According to Judy Diamond and Associates, an accepted authority on U.S. Party Administrators, there are over 1,000 TPAs in operation today, providing services to insurance organizations and self-funded plans. Services range from enrollment management and healthcare claims adjudication to worker’s compensation consulting and FSA/HSA management. To the end client, it can be difficult to differentiate between the many competitive offerings available. And for the TPA, fee schedules are under increasing pressure in the new, leaner marketplace. If there is one thing most TPAs today can count on, it is this: when your contract with a client is up, they’ll be soliciting bids from your competitors.
Administration costs for claims processing can range from 7-15% depending on the type of claim. That’s a big swing, and when you look at it in dollars and cents, it’s even bigger:
“James G. Kahn of the University of California-San Francisco discusses BIR costs at the provider level. He puts these costs in the context of a complex payment system, describing three main drivers of BIR costs: complexity, variability, and friction. Using available evidence, he estimates that up to $183 billion of expenditures on BIR activities in the United States may be due to inefficiency.” Source: http://www.ncbi.nlm.nih.gov/books/NBK53942/
Your clients are looking for every possible way to slice away chunks of that $183 billion. But you’re as lean as can be, right? You can’t lower fees, and in fact, you’d love to raise them; your costs are increasing faster than you can implement efficiencies to reduce them.
So how can a TPA strengthen client relationships so that when contract renewal time rolls around again, a payor is less tempted to consider alternatives?
A great tool used by some client-centric Third Party Administrators is The Claims Round Table. Here’s how it works:
Periodically, a collaborative session is scheduled between the TPA and the payor’s claims processing staff. The idea:
The Claims Round Table is an excellent relationship-building tool that will position your TPA not as a vendor, but as a reliable and trustworthy partner.
We don’t have time for this!
A reliable adage in the customer service business is, “If you can’t carve out extra time for customer service, don’t worry – you’ll have plenty of it soon.” So, make time. Or even, if necessary, offer the Claims Round Table as a paid modular option that is available as a regular service. Perhaps offer it to your clients for free for a few sessions, with the understanding that it will become a paid service after some predefined date. If you do it well, your clients will wonder how they ever lived without it.
Business for Third Party Administrators can be tough and competitive – always look for new ways to make your client relationships last!
Are you a Third Party Administrator? Contact us today. We’ll share ways we can help your company improve efficiency and decrease costs.