Vendor TPA: How to Effectively Manage the Relationship and Get Results
Whether your company self-administers its claims management, outsources, or has a bundled claims program, the quality of the claims management will have a major impact on your company’s financial performance in the short, medium, and long term. During a session at the WCI’s 2017 Workers’ Compensation Educational Conference David Stills, Vice President, Global Risk Management from Walmart Stores, Inc moderated a panel of experts that included Max Koonce, Managing Director, Sedgwick Claims Management Services, Valerie Franco, Vice President of Risk Management, Lowe’s Companies, Inc. and Chantel Mottram Kvigne, Vice President, York Risk Services Group.
Myth#1 People issues one less thing to deal with and worry about when I outsource claims management.
If you are a team, you are only as good as those people on that team. Employer needs to still be involved even when they outsource. Biggest challenge is communication and you need to understand how much information is too much information. How much information is just enough. Giving enough information so there are no concerns and minimal questions.
Mystery #2 Performance metrics in TPA contacts – they really work, guarantee that the TPA is incentives to perform well and are the optimal way to contact your TPA.
They can work. You have to work through the issues and differences.
Myth #3 Alignment of interests – there is perfect alignment of interest between TPA and insured.
Perfect no. There is definite inefficiency when you integrate that program and you will work through those ineffienceies to become and perform better.
Myth #4 TPA performance metric packages – it’s a good source, but as the ultimate payer, I’d better do my own analysis or one less thing to devote resources to once I outsource claims management.
Best practice is to understand the numbers they provide with the metrics package. Provide a tool to break down these numbers.
Myth #5-Financial results – Once I outsource, I cannot influence the results, thus I can’t be held accountable for bad numbers.
The main question is why or what has happened to get results that we do not want. It is a partnership. Speak early and speak often. Tell as many people as you can.
Myth #6 Compliance – Even though my claims management is outsourced, I’d better pay close attention to compliance.
Compliance is always going to be first and foremost. If you are not in compliance, there will be repercussions. Compliance is similar to turning the lights on when you walk into a room. When the consequences or outcomes fall on the insured, the insured needs to be aware of new rules and regulations and how to improve their practices.
Myth #7 Claims Performance Expectations – The best approach is to dictate them to the TPA and then strictly hold the TPA accountable.
When you would like a partnership, it’s imperative to take a collaborative approach. You can direct them but you can gain more ground and exceed expectations when you work together.
These are “lessons learned” from seasoned risk managers and vendor third-party administrator executives in claims management and what builds and drives an effective relationship between claims management and the insured.