Healthcare & Insurance TPAs

Emerging Challenges and Opportunities for Improvement

Executive Overview

Third‑party administrators (TPAs) are under growing pressure from all sides: regulators, payers, providers, and members. This white paper highlights four critical challenges facing healthcare TPAs today - regulatory and privacy complexity, data security and cyber risk, cost control vs. quality, and repeat calls driven by internal breakdowns.  It draws parallels to what is happening in broader insurance TPAs. The intent is to open a conversation about how leaders can tackle these issues while improving member experience and operational efficiency.

1. Regulatory and Privacy Complexity

Healthcare TPAs sit at the intersection of clinical data, financial transactions, and member privacy. New and evolving rules around data protection, surprise billing, price transparency, and interoperability are expanding the TPA’s risk surface.

• A TPA administering a self‑funded plan for a multi‑state employer may have to reconcile different state rules on surprise billing, prior authorization, and network adequacy, all while ensuring privacy requirements are consistently met.

• When the employer adds remote workers in other countries, the TPA suddenly faces cross‑border data transfer questions, consent requirements, and additional breach‑notification timelines; often without a corresponding increase in administrative fees.

In the broader insurance world (e.g., property & casualty or life), TPAs encounter similar pressures, different state DOI expectations, evolving claims handling standards, and consumer-protection rules; but without the added sensitivity of protected health information. Still, failure in either domain can damage the carrier’s brand and expose both parties to regulatory scrutiny.

Positioning for discussion:

• How is your organization operationalizing multi‑jurisdiction requirements today?

• Where do you see the biggest regulatory “blind spots” or manual workarounds?

• How much is this costing to manage and does it risk your competitive position as a TPA?

2. Data Security and Cyber Risk

Because healthcare TPAs handle clinical histories, diagnoses, claims notes, and payment data, they are prime targets for cyberattacks. A single breach can disrupt operations, trigger costly remediation, and weaken client trust.

• A claims system ransomware incident at a TPA halts adjudication and pre‑authorization decisions for days. Elective procedures are delayed, providers go unpaid, and HR teams at client employers are flooded with calls from anxious members who cannot get clarity on coverage.

• In another scenario, a phishing attack compromises an administrator’s credentials and results in unauthorized access to thousands of member records. Even if financial damage is limited, the reputational impact and downstream legal actions can be severe.

In non‑health insurance TPAs, similar risks exist—e.g., leakage of claim photos, adjuster notes, or financial details but the immediate clinical impact on individuals is lower. Healthcare TPAs have a narrower margin for error because data breaches can quickly translate into postponed care or avoidance of care due to fear of exposure.

Positioning for discussion:

• How are you balancing the need for open data flows with providers and payers against the need to lock down systems?

• What investments are you prioritizing—SOC reports, zero‑trust models, insider‑threat monitoring, vendor‑risk oversight?

3. Cost Control vs. Quality of Care

Employers and health plans increasingly demand that TPAs “bend the cost curve” while maintaining employee satisfaction and clinical outcomes. This dual mandate is complex, especially when incentives are not perfectly aligned.

• A TPA might design narrow networks and steer members to certain hospitals or specialist groups to control costs. However, if those providers are owned by an affiliated parent organization, employers may question whether recommendations are driven by cost/quality or by corporate relationships.

• A plan may introduce aggressive utilization‑management rules that reduce short‑term spending but create friction for physicians and patients, resulting in appeals, member dissatisfaction, and possible adverse health outcomes.

In the broader insurance TPA space, the parallel tension is managing loss ratios and claims leakage versus customer satisfaction and broker relationships. For example, a property & casualty TPA that is too aggressive in denying or reducing claims may hurt the insurer’s brand and invite litigation, even if it improves short‑term financial metrics.

Positioning for discussion:

• Where are you seeing the biggest tension between cost containment and member experience?

• How do you demonstrate to clients that your cost‑management strategies are clinically and ethically grounded, not just financially attractive?

4. Repeat Calls and Internal Breakdowns in Member Experience

A growing pain point—especially visible in healthcare TPAs—is the member experience around access and scheduling, which often sits at the nexus of provider operations, benefit design, and contact‑center practices.

A common scenario looks like this:

• A patient calls the TPA or plan’s member-services line asking for help with an appointment for a covered service.

• The agent checks limited scheduling information or relies on general guidance from the provider group and tells the patient that nothing is available “right now,” but to keep calling back because “slots open up regularly.”

• The patient, unsure whether the issue is network capacity, referral rules, or prior authorization, calls multiple times, speaking to different agents who repeat the same script without resolving the underlying problem.

Consequences:

• Increased call volume and handle time driven by repeat contacts, which raise operating costs for the TPA and frustration for providers and employers.

• Erosion of trust among members who feel “ping‑ponged” between the TPA, the provider’s office, and HR, with no clear owner of access to care.

• Potential downstream clinical impact when delays in scheduling preventive or follow‑up care contribute to worsening conditions and higher long‑term costs.

In non‑health insurance lines, a similar dynamic occurs when policyholders are told to “call back later” because adjusters or vendors are not ready, causing multiple contacts and dissatisfaction. However, in healthcare, those delays are more personal and tied directly to health and well‑being.

Positioning for discussion:

• How are you measuring and reducing repeat-contact drivers in your member and provider interactions?

• Are scheduling and access issues being treated as core operational KPIs, not just “call center” problems?

5. Parallels with Broader Insurance TPAs

While healthcare TPAs face uniquely sensitive data and clinical stakes, their core challenges mirror those across the TPA landscape in other lines of insurance:

• Regulatory and compliance pressure is rising everywhere, though health carries additional clinical and privacy layers.

• Technology debt and fragmented systems create friction, inconsistent data, and poor visibility for carriers and clients.

• Tension between financial performance and customer experience shows up in claims outcomes, service-level expectations, and broker/employer relationships.

Healthcare TPAs that solve these challenges effectively can position themselves as strategic partners, not just back‑office processors. The same holds for TPAs in property & casualty, life, and other specialties: those that modernize, integrate, and redesign the experience stand to gain disproportionate market share and client loyalty.

Invitation to discuss

This white paper is intended to open a practical, candid dialogue not to criticize any single organization. A conversation could focus on:

• Where you are seeing the most acute pressure today: regulation, risk, cyber, cost, or experience.

• Opportunities to pilot targeted change that is a differentiator for a TPA. 

If these themes resonate with what you are seeing in your business, it may be worth setting aside time to compare notes and explore potential areas for collaboration or improvement.