Third-Party Administrator (TPA) Claim Denials

Overview

Third-party administrators (TPAs) process claims for self-funded employer plans. TPA denial rules are set by the employer's plan document, not by the TPA. This means denial codes, appeal deadlines, and coverage rules can differ between two employers using the same TPA.

Key Requirements

  1. Identify the TPA from the member's insurance card. Common TPAs: Meritain Health, HealthSCOPE Benefits, Allegiance, Claim Management Services.
  2. Request the Summary Plan Description (SPD) to understand coverage rules.
  3. Timely filing deadlines are set by the employer plan, not the TPA. Typically 90-365 days.
  4. Appeal deadlines are governed by ERISA (Employee Retirement Income Security Act): minimum 180 days for the first level.
  5. Self-funded plans are regulated by federal ERISA, not state insurance laws.

Timeline

Day 1: Identify the TPA and plan. Days 1-7: Review denial code and request SPD if needed. Days 8-14: Gather documentation. Days 15-30: Submit appeal to TPA. Days 31-60: TPA review. Decision within 60 days for pre-service, 30 days for post-service. After internal appeal: external review under ERISA.

Common Denials

CARC Code Reason Primary Cause Fix
CO-50 Non-covered service Not in employer plan document Request SPD and verify coverage
CO-29 Timely filing Filed after plan deadline Verify plan-specific filing limit
CO-197 No prior auth Auth required by plan Check TPA for PA requirements
CO-45 Fee schedule exceeded Above plan's allowed amount Verify plan fee schedule with TPA

Appeals

ERISA requires self-funded plans to provide at least one level of internal appeal with a 180-day filing window. The plan must decide within 30 days (post-service) or 15 days (pre-service). After exhausting internal appeals, request external review. External review is binding on the plan.

FAQ

How is a TPA different from an insurance company?

An insurance company assumes financial risk for claims. A TPA only processes claims on behalf of a self-funded employer. The employer pays claims from its own funds. This means the employer's plan document, not the TPA's policies, determines coverage and denial rules.

How do I find the employer's plan document?

Request the Summary Plan Description (SPD) from the TPA or the employer's HR department. Under ERISA, the plan must provide the SPD within 30 days of your written request.

Do state insurance laws apply to TPA-administered plans?

Generally no. Self-funded ERISA plans are federally regulated and preempt most state insurance laws. This means state prompt payment laws, state appeal requirements, and state mandated benefits may not apply. Federal ERISA rules govern instead.

Prevent These Denials

Altair identifies TPA-administered plans and pulls the right denial rules for each employer.

Related Resources

This reference is current as of 2026-03-23. Payer policies change. Always verify against the payer's latest policy documentation.
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