As a business owner, risk manager, or human resources director, you have a lot on your plate when it comes to managing your company’s day-to-day operations. Depending on your business, it may be easier to offload some of the standard processes to a trusted partner – such as routine administrative duties, record maintenance, and drug and alcohol testing programs.

That’s where a Third-Party Administrator (TPA) comes in play. A TPA can help manage all the logistics of a substance abuse or general occupational health program so you can focus on what you do best. If you aren’t sure exactly what a TPA does or how working with a TPA can benefit you, we’re covering all the basics you need to know.

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What Is a Third-Party Administrator (TPA)?

A third-party administrator is a company that provides operational services such as claims processing and employee benefits management under contract to another company. Insurance companies and self-insured companies often outsource their claims processing to third parties. Thus, such companies are often called third-party claims administrators.

A TPA works as the alliance between the employer (the first party) and the testing lab or occupational health service provider (the second party). They maintain required testing records, check that services are completed without any issues (or fix the issues if there are any), and ensure that the company is compliant with federal and state regulations.

The use of third-party administrators is now common in many businesses, and the range of tasks they undertake is growing. They have distinct roles in the health insurance industry, commercial liability insurance, and investment company operations. Some firms are moving into new areas such as forensic accounting services, workers' compensation audits, and emergency response planning.

Benefits of using a TPA

There are a lot of logistics and regulations involved with occupational health services, especially if you’re in a federally regulated industry like transportation. Outsourcing those responsibilities to a TPA can save you time and money.

One of the greatest benefits a TPA can provide is the merging of bills. Rather than managing invoices from multiple providers for multiple services, the TPA pays the invoices and sends a single bill to the employer.

A TPA can make the whole process easier for employers. TPA’s have a network of occupational health providers, like Mega Health Services, that they can plug your employees into. They’ve already evaluated these providers to ensure they provide quality services, and already have a developed relationship. TPA’s also hold and maintain required testing and screening records so you don’t have to worry about managing the paperwork. If an employer encounters an issue with an employee’s services, a TPA can run interference to get the matter resolved quickly.

For more informationThird Party Administrators/What are Consortium?