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World Class TPA Review

MCS defines “World Class” TPA performance as 15-20% revenue growth per year with 15-20% EBIDTA.  The challenges in the market including required technology enhancements, competition for clients and employees, changing benefit delivery and compliance requirements are a constant challenge to achieving these results.


The World Class Review is designed to assist the TPA in moving toward World Class status by taking into consideration the market challenges when lined up with current TPA metrics and efforts.  The analysis and recommendations are developed based on interviews, observation, market analysis and data analysis.  MCS maintains the only proprietary and highly confidential metrics database for the TPA industry.


The review process is very comprehensive, including marketing and sales efforts, marketing materials, account management and retention strategies, day-to-day operations, vendor relationships, reinsurer relationships and expense management.  Areas to be reviewed include, but are not limited to:


Overall Company Results
  • How do the TPA’s historical results for net growth, client turnover, revenue per covered employee, operating expenses and margin compare to industry benchmarks?

  • Given all of the factors influencing the Self-Insurance Industry and the TPA, what can the TPA expect in the area of revenue growth and margins?

  • What is the overall value of the Company based on recent TPA transactions and the TPA’s most recent results?  What can the TPA do to increase its value?


Human Resources
  • How does the TPA’s overall staffing ratio of FTEs per 1,000 covered employees compare to industry benchmarks?  What steps have other TPAs taken to reduce staffing?

  • How does the TPA’s compensation compare with industry benchmarks on a position-by-position basis?

  • What strategies should the TPA consider with respect to incentive compensation?

  • How do the TPA’s Training & Development programs compare with industry “best practices”?


Marketing & Sales

  • Does the TPA have the most effective distribution arrangement in place and is the distribution network compensated appropriately to achieve desired results?

  • Are the TPA’s marketing materials and sales messages aligned with Broker and Plan Sponsor areas of interest?

  • Do the marketing materials, proposals and presentations highlight areas where the TPA has advantages over their competition?


Account Management

  • Has the TPA addressed client interest in accountability and reporting results?

  • Has the TPA implemented strategies to increase “proactivity” with their clients?

  • Has the TPA implemented strategies to shift client focus from “fixed cost” to high-quality service and cost management?



  • Is the TPA meeting the SSAE 16 Standards for Financial and Operational Control?

  • Are there areas in the TPA’s operations that are inefficient and do not provide additional value for the TPA’s clients?

  • Is the TPA’s technology meeting the needs of the operation and what enhancements should be considered?

  • Are the TPA’s work-flows appropriate given its staffing and system capabilities?

  • Is the TPA staffed appropriately given number of clients, number of claims transactions and number of phone calls?

  • Are the TPA’s Quality Assurance and Quality Improvement programs focused in the appropriate areas?

Finance & Other Areas

  • Does the TPA manage operating expenses effectively?

  • Are the TPA’s contracts with vendors the most competitive possible?

  • Does the TPA utilize available management information effectively internally and with clients?


The World Class TPA Report

Within 2-3 weeks of a Site Visit where extensive interviews and observations are completed, MCS will provide the TPA with a World Class Report (usually 60-80 pages in length) detailing all observations and prioritized recommendations.  Where appropriate, MCS provides guidance in implementing the recommendations including tools, procedures, samples and RFPs.

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