TPA Fees May Not Be Correct in New Jersey
The TPA Fees are not correct in New Jersey. New Jersey’s Comptroller issued a statement last week that Third Party Administrators (TPA’s) for Workers Comp claims may be receiving side payments between the TPA’s and the managed care or bill review companies.
At no time did the Comptroller say this practice was illegal. Instead, there were questions on the effectiveness of the cost-savings if the TPA referred business to a company that had a side-agreement with them instead of another company that can do a better job.
Obviously, the Comptroller’s office consulted no one in the WC claims community. These agreements actually reduce the amount the clients are paying the TPA’s. The TPA’s are able to pass along savings they have negotiated with the companies which they use for rehab and bill review.
In other words, the bill review and rehab companies are willing to charge the TPA less if there is a certain volume of business. The bill review and rehab companies could possibly pay incentives to the TPA for a certain volume of business.
In turn, the TPA’s clients may likely end up paying much less for bill review and rehab services. I do not see the TPA’s clients being shorted in these instances.
I heavily agree with the NJ Comptroller saying the governmental entities should do a review of their TPA program, and unbundle the ancillary services. The entity may be shocked to find they are paying much more for unbundled services than if they were placed with a TPA.
We do see some of this happening in our TPA file reviews. However, when we compare the TPA’s bundled and unbundled charges, often the client is actually saving more $ than if they unbundle the services.
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