The concept of ethical administration has rapidly become a hot topic – so much so that it is the theme of this year’s Health Care Administrators Association (HCAA) TPA Summit. This post, inspired by insights from Nicholas Stone, SVP, Medical Cost Containment Sales at Expion Health, examines what constitutes “Ethical Administration,” aiming to highlight the importance of transparency and integrity in managing non-network claims.
As we prepare for the upcoming HCAA TPA Summit, this year’s theme draws attention: The Ethical Administrator. It raises questions about how Third-Party Administrators (TPAs) and Health Plans define and adhere to the ethical standards they set.
In recent months we have seen numerous mentions and lawsuits directed at prominent administrators and vendors in the Self-Funded claims management space. These legal challenges revolve around the alleged incentives to minimize payments for out-of-network claims, driven by the standard contingency fee-based agreements between vendors and their administrator clients. Such arrangements suggest that lower payments increase vendor revenue, potentially overlooking the detrimental effects on providers and members.
Furthermore, I have spoken to numerous administrators, brokers, and Self-Funded groups recently regarding the challenges they experience with traditional Referenced Based Pricing (RBP). While RBP is touted as straightforward to administer with minimal provider resistance and high employee satisfaction, the reality appears different. The practice of reimbursing at a flat percentage of the Medicare Fee Schedule can lead to an overwhelming number of appeals, sometimes escalating to lawsuits, and frequent incidents of balance billing where patients are charged the difference. Additionally, the level of post-payment support provided to groups and their employees often does not meet initial promises. Again, raising the question, is this supporting or hindering Ethical Administration?
These challenges highlight the importance of evaluating outsourced service provider practices to ensure they meet your organization’s Ethical Administration standards. It is crucial for administrators to control and monitor outsourced functions to maintain transparency and alignment. At Expion Health, we are committed to transparent partnerships and consistently upholding our clients’ ethical standards.
