There are many reasons why companies change or bring on new TPA firms: mergers and acquisitions, performance related issues, cost, and poor adjuster service among other reasons. This is not a pleasant task and presents many challenges to your organization including a potential disruption in your business process.
Challenges when changing TPAs
When the decision is made to bring in a new TPA, there are many factors to consider:
Migrating your claim files from the outgoing TPA
If you choose to move old claims to the new TPA, odds are your new TPA is using a different claim system. Planning needs to be done for migrating not only open claims, but potentially a high number of closed claim files. Even if the claim records were created in a paperless environment, migrating the data typically is not an easy task.
Training new adjusters
New adjusters provided by the TPA need to be educated on your policies and claims processes to maintain customer satisfaction. Optimally, as part of the RFP you will have spelled out service expectations suitable to your process-flow and culture . You will need to establish a training period and design and maintain a QA process. Of course the focus will be on new and recently opened claim files.
Closing out legacy claims if you don’t migrate into the new TPA
Leaving prior claims with your old TPA allows the new TPA to totally focus on current claims. This also is optimal for a fruitful onboarding and training period. However, dealing with legacy claims is one of the least attractive tasks when making a change with your TPA firm and is commonly overlooked. Claims left with a prior TPA need more attention than you might imagine. There is considerable history to review with claims that have been churning for months or even years and a “lame-duck” TPA may not be inspired to provoke claim resolutions
Taking legacy claims out of the equation by having a third-party firm that specializes in closing out these claims is one less thing to worry about during the on-boarding process. There are also additional benefits to this approach:
New adjusters can focus on new and recently opened claims to ensure a high level of customer satisfaction.
In many cases it can be a smoother transition migrating closed claims than open claims.
The time involved for new adjusters to review legacy claims can be significant and usually isn’t a priority, meaning these claims will continue to “churn”.
The new TPA firm may not have an approach and experienced adjusters to deal with legacy claims.
Excluding legacy claims from your RFP and contract negotiations can also provide you with a stronger position and lower cost in overall TPA fees.
To have a clear understanding of how your new TPA is performing, why saddle them with someone else’s unfinished works? Providing them with a clean sheet will give you a clearer view of how the TPA is performing.
Off-loading legacy claims to a 3rd party that specializes in the accelerated closure of them, with incentives to “close” rather than “churn”, provides a dedicated focus to getting these claims off your books.
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