Maximizing Results from Your TPA - Part One

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Self-insured employers and those unbundling their claims handling from their insurance programs are continually seeking ways to optimize their results from their workers’ compensation programs.

Key to leveraging outstanding results is the effectiveness of the partnership with your Third-Party Administrator (TPA) that handles your claims. Recently, our client, Caryl Russo, Senior Vice President at RWJBarnabas Health and I presented a session to workers’ compensation professionals, Maximizing Results from Your TPA, that addresses this topic.

The presentation was based on the partnership between RWJBarnabas Health, the largest integrated health care system in New Jersey with 35,000 employees and their TPA, PMA Management Corp. Since 2012, the results of the partnership include an average annual reduction of 3,164 disability days associated with workers’ compensation claims, as well as an average annual decrease of 86 lost-time claims, estimated to generate $26 million savings for RWJBarnabas Health based on the average cost of a lost time claim in the state of New Jersey.

How did the partnership achieve this success? “The first step in establishing a strong partnership with your TPA is to choose your partner wisely. There should be many considerations beyond cost, as you get what you pay for,” says Ms. Russo. She advises being an educated buyer, seeking trusted recommendations, and making sure your TPA knows your business and industry—and has an outstanding reputation.

We have found that four pillars are the keys to an employer maximizing results from their TPA:

Pillar One | Leadership

The importance of effective leadership in the workers’ compensation program from both the employer and the TPA cannot be understated, particularly given the complexity of workers’ compensation. The following are hallmarks of effective leadership from both organizations:

  • Empowerment
  • Has influence up and down their organization
  • Focuses on the right things
  • Involved in the program day-to-day program
  • Built around senior leadership buy-in
  • Is accountable

Leadership in this case involves creating the vision of what you want to achieve and the ideal partnership. Our vision included creation of a workers’ compensation team with all members focused on doing the right thing for RWJBH employees, particularly injured workers, and a partnership free from variability, silos and barriers.

Pillar Two | Creating the Right Framework for the Employer/TPA Partnership

The TPA account manager needs to create a solid start, which includes conducting launch meetings in which you map out a plan together and create expectations for the partnership. The right framework also means helping the TPA understand your business and your needs. Invite the TPA staff to attend meetings at your location, including safety meetings. Share your business plan with your TPA so they will know your accountabilities in the upcoming year. Update them on any business plan changes.

Having the right framework also means yearly planning. Establish joint short- and long-term goals at your launch meetings, and conduct checkpoint meetings throughout the year.

Develop strategies for working with your other services providers, such as attorneys, transportation companies, etc. Establishing expectations from the beginning is crucial, as is establishing benchmarks and parameters—and communication channels to resolve any issues that may arise.

Next week, we’ll discuss the final two pillars to maximize success with your TPA.

Read Maximizing Results from Your TPA - Part Two


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