Third Party Administrator (TPA) and Managed Care Organization (MCO): What’s the Difference?
Many employers are confused about the different responsibilities between Third Party Administrators (TPAs) and Managed Care Organizations (MCOs). Both play a vital role in mitigating cost and returning injured workers to work as soon as medically possible.
First, the Ohio Bureau of Worker’s Compensation (BWC) requires that all employers have an MCO and there is no direct cost to the employer for their services. MCOs are responsible for managing and monitoring the medical portion of workers compensation claims including maintaining a medical provider network, submitting First Reports of Injury documentation to BWC, monitoring medical costs and medical bill payment, ensuring proper utilization of medical services and monitoring medical needs and level of care. They are also charged with helping to insure injured workers return to work as soon as medically possible by helping to facilitate return-to-work programs and vocational services in coordination with your TPA. As we all know, the sooner an injured worker returns to work, the better for all concerned.
While MCOs are impartial parties to the claim focusing on medical management, TPA’s responsibilities are specifically focused on reducing the administrative and financial burden of the workers’ compensation system on the employer community. Their responsibilities include managing employers’ workers’ compensation programs and providing them with cost control strategies and programs to directly reduce their workers’ compensation costs. Employers pay service fees directly to TPAs for their assistance with claim administration, claim appeals, consultation / advice and assistance on cost control strategies for lost time claims, monitoring experience claim costs and representing employers at Industrial Commission hearings. In addition, TPAs provide rate analysis and financial impact studies to help employers make informed decisions. One of the most important functions of a TPA is the expertise and ability to provide employers the opportunity to reduce their workers’ compensation premiums through group rate discount and refund programs. Quality TPAs also provide client education, workshops and seminars to increase employer knowledge and to help them meet BWC training requirements.