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TPAs Under Pressure Due To Recession’s Effect on Claim Numbers


Third-Party Administrators (TPAs) Feel Recession Pinch

Should TPAs handle more with less? In our claims reviews for employers, we have noticed an interesting scenario developing recently.

Graphic Of Cash Flow TPA's Chart

One area that many insurance personnel and analysts overlook is the increased internal pressure on a TPA’s claims staff.  In a recession, the number of claims may lessen. According to recent analyses by the NCCI, the dollar value of those claims increases enough to offset the decrease in volume.

The handling of each file intensifies causing most claims staff to have the same amount of work but with fewer claims. With TPA fees decreasing due to volume, how long can a TPA keep the same level of staff to handle the declining volume, but with more complicated and lingering claims?

I have seen technology being mentioned as one of the answers to this problem. However, there is only so much technology that can assist the “hands-on” adjusters and support personnel in handling the claim loads.

Usually, I will include an answer to a problem. I am not so sure on this one. Heavily increasing the file loads on the staff is not the answer, but only a quick fix.

You can easily tell when an adjuster has reached the point of being overloaded.  They lose the ability to communicate efficiently on all files and to their supervisors/managers, which causes the TPA’s clients to pay more than is necessary for their claims.

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James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications


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