Critical TPA Contract Terms
| Term | Employer-Favorable Provision |
|---|---|
| Data ownership | Employer owns all claims data; TPA is a data processor |
| Data portability | Employer can export complete claims data in standard format at any time |
| Termination | 90-day termination notice; no penalty for termination for cause |
| Run-out | TPA processes run-out claims for 12 months after termination |
| Audit rights | Employer can audit TPA claims processing and financial records |
| Subcontractor disclosure | TPA discloses all subcontractors and their roles |
Data Ownership
Data ownership is the most critical TPA contract term. The employer should own all claims data — the TPA is a data processor, not a data owner. Without clear data ownership, the employer may not be able to access their own data or take it with them when changing TPAs. Confirm data ownership is clearly stated in the contract.
Transition Planning
IQ Insight
TPA transitions are complex and disruptive — plan carefully. Key transition elements: (1) data migration — ensure complete claims data is transferred to the new TPA; (2) run-out — the old TPA must process claims incurred before the transition date; (3) member communication — members need new ID cards and contact information; and (4) provider notification — providers need to know where to submit claims. Allow 6–12 months for a smooth transition.