It is time for TPAs to pay for their broken promises. Over years and decades, “TPA service” has coalesced into a data-algorithmic, process-efficient yet impact-deficient entity. National TPA providers are almost indistinguishable in their essence. Adjusting services alone are a commodity-priced loss-leader, with real profit sources sought from mysterious, perverse and dubious Managed Care schemes.
The marketplace of buyers is led to believe that their employees are best served thrown into TPA protocols: three-point-contacted, fast-tracked, and manage-cared back to productivity. Employers know this assumption fails often, with ease, and in grand form. What can employers do in the face of claim failures? Nothing!! Employers must increase reserves and pay. Many employers know this frustration.
I suggest we start a movement to improve services. TPA promises should be held to specific tests with failure subject to penalties. Three specific failure items that can be tracked and charged are as follows:
1. Employee secures legal counsel
2. Fast-track claim converts to complex
3. Employee expands medical diagnosis and care beyond initial outlook
Quick Tip: Ascertain TPA Responsibility & Penalize TPA Failure
1) Employee secures legal counsel: The TPA has failed when an employee reports a claim and is frustrated in trying to deal with their adjuster to the point where they secure counsel. This can be confirmed by simple questioning of the employee. The TPA should be penalized at up to 30% of the entire claim cost, since many national studies show attorney representation increases costs by somewhere around 30%.
2) Fast-Track claim converts to complex: Let us be clear – TPA eagerness to fast-track new claims has everything to do with applying minimal resources and little to do with identifying outliers that need critical efforts. The TPA has failed when a fast-tracked claimant stays under the radar then emerges with any number of footholds including: surgical appointments, unauthorized treatment and/or diagnostics, a new and questionable story of how the accident occurred, legal counsel, new and different body parts or diagnosis, etc. The TPA should be penalized up to 50% of the added costs that can be ascribed to the missed opportunity. For example, if an initial mild stubbed toe emerges with surprise hip MRI and replacement recommendation which is too late to refute, up to 50% of costs related to that hip belong to the TPA.
3) Employee expands medical diagnosis and care beyond initial outlook: With all the glory heaped upon Managed Care by the TPA industry, one would hope for its actual power to “manage care”… maybe add some value above its lowest level of service in the automated reduction of pre-inflated medical bills. As such, TPA failure is when an initial diagnosis and treatment plan is changed, augmented and accepted as a new claim phase months or years later. To ascertain this service aspect, the early claim phases would require the TPA to seek and confirm all casually related diagnosis and body parts, effect exclusionary diagnosis to rule out well known “creeping” diagnostic patterns, confirm a treatment plan, and place this on the claim record as a basis for success. If the treatment plan is unsuccessful, for instance the associate is able to change platforms on the cusp of MMI, the TPA would be subject to a review of their efforts to mitigate the medical changes. They would face a penalty of up to 50% of added costs due to the expanded medical outlook. (Knowing medical wildcats abound in the WC world, the TPA can be absolved by proactively securing an early settlement before accepting unreasonable treatment.)
In closing, I have railed against TPA failure in numerous prior writings over the years. Unfortunately, I see nary a spark of revolution among the ill-served employers and their better-deserving employees. I hope this pay-for-failure concept inspires action for some considerable employer who might lead the way in making the TPA industry realize more honest impact.
Give me call if you want help.