Payers move deeper into TPA model, according to poll

YARMOUTH, Maine – The accelerating shift to third‑party administrators (TPAs) appears to be gaining steam: Ninety‑two percent of respondents to a recent HME Newspoll say payers are already using or transitioning to this model, and most of the rest expect it within a year.

“I think this has the potential to be very disruptive and negative for small DMEs,” wrote one respondent. “The TPAs don’t seem interested in engaging suppliers of our size that have a personal touch to patient care. Patient satisfaction and outcomes have nowhere to go but down under that type of arrangement.”

UnitedHealthcare currently has four major contracts with Synapse Health to manage DME products and services. Blue Cross Blue Shield of Tennessee and Molina Health have also recently inked deals with CareCentrix to use its DME Navigator ordering platform. 

Fees squeeze provider margins

When payers turn to a TPA to manage DME products and services, it can mean lower reimbursement and new – and sometimes costly – process and requirements. That has a big impact on revenue and margins, say 50% of respondents.

“The rates are not sustainable but then they (also) want you to pay to receive the order – this adds about $14-$15 to the cost of the order,” wrote one respondent.

Barrier disrupts communication

Also frustrating: TPA models can add a layer between providers and patients, say respondents.

“UnitedHealthcare using Synapse has removed us from being able to discuss (out-of-pocket costs) with patients and offer copay support,” wrote one respondent. “It has added an extra layer of work for the patient who now has to call Synapse to get OOP and often causes confusion. As I am sure is UHC's hope, more patients are declining equipment setup.”

Automation undercuts appeal

Respondents say that as ordering processes become increasingly automated on a provider level, the administrative efficiencies promoted by TPAs are no longer as critical as they once were.

“With today’s technology like electronic records and real time billing, much of that can be done more efficiently without a middleman,” wrote one respondent. “Administrative costs in U.S. health care make up about 25% to 30% of total spending. They also add excessive, unnecessary processes that tie up time, delay care through approvals, and ultimately provide minimal cost savings.”