workerscompbiz.com

If you are a very small business, you may think that you want a TPA that “rubber stamps” all treatment requests, because you are the only one who will ever be injured. But beware!
A claim with substantial medical costs could get your company eliminated from group rating in two years.
Here’s an example when rubber-stamping is not a good idea: The employee hurt her shoulder at work. She was seen in the ER and got a diagnosis of strained shoulder. She was then seen by an orthopedist, who recommended 3 weeks of physical therapy (PT), and if no relief, injection into the shoulder. She started PT, and at each follow up visit was seen by a Certified Nurse Practitioner (CNP), who recommended that the PT continue, despite the patient’s complaints that her shoulder felt unstable. The MCO authorized 10 additional PT sessions, but I (the TPA) suggested that the patient be seen by a medical doctor instead. The doctor suspected a tear, and recommended evaluation by a surgeon.
If you were the patient, would you want the MCO to approve all requests, or would you want an MCO to review and actively manage your claim?

Will your company be well served by using an MCO and TPA that are sister corporations?
MCO stands for Managed Care Organization. Its job is to manage the medical care of the injured workers. It is paid a percentage of your premiums, so its financial best interest is to authorize as many treatments as possible.
TPA stands for Third Party Administrator. Its job is to manage all of your claims to keep your premiums as low as legally possible. The TPA should be a watchdog over the medical services authorized by the MCO.
If the TPA and MCO are sister corporations, how likely is it that the TPA will challenge the services authorized by its sister? In my experience, companies that use a TPA and MCO owned by the same corporation will see increases in their claims costs, and may then be eliminated from group rating.
If the TPA offers to manage your claims for a minimal amount, like $75, how likely is it that the TPA will aggressively work to keep your claims costs down? Can a business really be profitable when it gives its services away for such a small amount?