When I was [employed] at a large conglomerate we were able to set up a cost-plus program in which we bought all the expenses plus a profit margin. Our adjusters loved us because they had the lowest caseload. Their colleagues were envious of the low caseloads, which made it easy to recruit top talent to our team.

Laurie J. Champion
Managing Director and Chief Administrative Officer
Aon Risk Solutions
Atlanta

Risk managers cannot give up control. You cannot distance yourself on responsibilities for your claims program, just because you have hired a TPA or your company will pay a price for that in increased costs and dissatisfied claimants.

Three characteristics separate a good TPA from an exceptional one. First, business acumen. Does the TPA understand my business and how to work with me?

Second, operational excellence. Does the TPA execute well, does it have the right processes and mindset to uncover issues early and resolve them? Does the TPA have the right people and the right technology?

And third, does the TPA understand my business priorities? This includes how I want my people to be treated. Can the TPA support the culture of my business?

Gary Pearce
Vice President, Risk Management Group
Kelly Services Inc.
Troy, Mich.

It's difficult for a TPA to ensure utter consistency in individual claim files when it has thousands of files, different laws in every state, multiple regional claim offices and adjusters, and staff turnover. The TPA needs to have the practices and infrastructure to monitor and measure its own performance so it can identify and address shortfalls before the client does.

Sarah Perry, ARM-P
Risk Manager
City of Columbia, Mo.

The City of Columbia is a public entity. We have diverse operations—police, fire, waste management and power generation—that have different types of claims that all must be handled by one TPA.

Unless your TPA is in the same location as the risk manager, there will be some disconnect between medical providers, local politics and claimants' understanding of the TPA's role. In our situation, we are located close to our TPA. We have medical providers in Columbia who are much more comfortable dealing with people they know, and it puts more responsibility on my office.

National TPAs have specific procedural guidelines and operations. It takes longer to get things changed or to deviate from standard practice. With our regional TPA, I can deal directly with the president of the company and there aren't as many layers that changes have to be cleared through. Because it is a little smaller, this TPA doesn't have as much turnover in what I have experienced when I have worked with national TPAs.