New Jersey May Not Be Correct On TPA Fees – NJ Comptroller

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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.

New Jersey Map and green background TPA Fees Graphic
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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 clams 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.

Picture Senior Man Taking Out Money from His Wallet TPA Fees New Jersey
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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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James Moore

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Mgmt 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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