TPA Licensing – Drafting a Plan of Operations

TPA Licensing - Drafting a Plan of Operations

Jason Robbins, J.D.

Consultant

A core component to any quality TPA Licensing submission is the development of a clear Plan of Operations. The majority of states will require that a Plan of Operations accompany the TPA license application. The more detailed the Plan of Operation, the less likely it will need to be expanded and/or revised for other states.  The Plan of Operations is often what introduces a TPA to the regulator so it’s important to provide a thorough discussion on your qualifications to hold a TPA license in the state in which you are applying in.

To make sure that the Plan of Operations will be acceptable for most states, we recommend you cover the following topics:

• TPA’s mission statement or reason for seeking licensure
• Company history
• Types of services you intend to offer
• Competitive advantages or what makes your TPA unique
• Description of TPA’s staff and their competency as well as information on facilities
• Strategic marketing plan
• Insurers or plan sponsors that will utilize the TPA’s services in their state
• Up to date list of jurisdictions in which the TPA is currently licensed (if any)

We’ve also found it beneficial to include certain items as exhibits or attachments to the Plan of Operations. An organizational chart of related entities is a convenient reference for regulators as they review your company structure. Similarly, an organizational chart of key employees or divisions of your TPA gives the regulator a quick snapshot of how your company functions and who is responsible for certain activities.

While the items above are what we consider to be the core elements of a Plan of Operations, there are certainly additional topics that some states will ask you to address.  It’s important to review your Plan of Operations to verify that any state-specific information is updated prior to submitting to a new jurisdiction.  Additional information or documentation required by some states include:

• Description of internal control procedures
• Complaint and appeal procedures
• Financial projections for future years
• Statement regarding sources of working capital
• Fraud prevention plan
• Description of claims payment process and expected processing times
• Training and hiring requirements

A well-drafted Plan of Operations can help a TPA make a great first impression with the regulator and get the licensing process started on the right foot.

Please contact one of First Consulting’s experienced licensing consultants to discuss drafting your Plan of Operations and state-specific requirements.