Understand the fee behind the reported savings.

What does a TPA do?

A third-party administrator, or TPA, handles agreed administrative tasks for a health plan, such as processing claims. The services and fees depend on the contract. A percentage-of-savings arrangement may calculate a fee from a reduction between a billed charge and an allowed amount.

An example you can change.

In our fictional example, a $20,000 billed charge becomes a $4,000 allowed amount. A 30% fee on the $16,000 reduction is $4,800. The allowed amount plus that modeled fee is $8,800. This is an illustration of arithmetic, not a claim about typical rates or hidden charges.

Find these contract inputs.

• The fee base and how it is established.
• The percentage rate and any exclusions.
• A documented cap and the charges it covers.
• Separate flat fees or other vendor charges.
• Itemized reporting, audit rights and the way patient cost sharing is determined.

Ask for a complete comparison.

The calculator models one defined arrangement. It excludes other plan charges and does not allocate patient cost sharing. If your agreement uses a different base or cap, ask for a calculation that matches it. Compare total costs and services before drawing a conclusion.