There are plenty of candidates – work comp TPAs who solicit fees from service vendors, vendors who offer to pay fees to get on a “preferred” vendor list, individual buyers with their hands out.
But when you get right down to it, the folks that are most at fault are also the ones most affected – employers.
Employers are the ones who demand ever-lower per-claim fees from TPAs, and TPAs who want their business have to play that game. Truth is, it is impossible for any claims organization to deliver professional, solid, responsible claims handling for $1200 per lost time claim. They have to make their money somewhere, and that “somewhere” is with more fungible, less visible, claim-specific services.
Case management, utilization review, bill review/network access are just a few of the categories that escape close scrutiny yet add up quickly. Many of these services are categorized as medical services and thus hit the file as non-administrative. That category is almost always all but ignored during audits or file reviews, and thus is ripe for…margin making.
Before you start yelling about the dastardly TPAs and their evil ways, stop and consider why they do this. It’s pretty simple; if your core service is commoditized and you’re constantly under rate pressur, you’ve got to do something to stay in business. So, you find other ways to generate the dollars needed to deliver the level of service your customers demand.
I place the blame squarely at the feet of employers and their brokers and consultants. There’s just not enough effort to really understand how TPAs differ, why one costs more and what their value propositions are. It’s too easy to plug all the numbers into the spreadsheet and not try to figure out why TPA A does things this way, and TPA B does it this other way.
Nope, claims is claims.
There’s another reason employers have to accept a big chunk of the blame. Many know fee splitting occurs, but don’t have the energy/motivation/ability/professionalism to pursue it.
What does this mean for you?
Is this acceptable?
Note – I heard from more than one colleague who wants me to “name names”. It is NOT my responsibility to do that. I’m not harmed by nor do I benefit from the practice of fee splitting. Moreover, don’t act like this is “new news”; this is hardly a revelation. It has been going on for years, and everyone knows it.
I will admit to being quite frustrated with stakeholders who somehow feel I – and others – need to try to fix problems with the work comp world, problems neither of our making nor solvable by anyone other than those affected by them.
As our son’s high school lacrosse coach often said – you’re either a finger or a thumb. The finger assigns blame to someone else, while the thumb points back to you.
Are you a finger, or are you a thumb?