Pros and Cons of In-Sourcing Medical Claims Administration

[CaliBen]

Appreciate all insight on merits of in-sourcing claims administration v. using a TPA v. using medical vendor for larger (Fortune 500 size) corporations.

[ERISAAPPLE]

There are so many relevant factors it would impossible to address them all here.  Here are a few.  If the plan is self-funded, it is always nice to have the final discretion to pay benefits.  You can have that though and still out-source.  If in-source, the claims regs require you to hire a medical professional for claims involving medical judgments (unless you already have an in-house resource).  In either case (insured or self-insured), the provisions of most "plan documents" are really just software on the insurance company's computers.  That makes it more efficient for them to administer the claims.  They know what their products cover.  For HIPAA, it is easier to separate the plan from the plan sponsor if outsourced, but I would not consider that to be a driving factor.