To TPA or Not to TPA

In the realm of the restoration industry, success is often mixed with challenges. One that comes to mind that industry professionals face is whether or not to integrate their company with a third-party administrator (TPA) network.

In the September/October 2023 issue of Cleanfax, Nate Cisney, with Restoration Made Simple Consulting, wrote the cover story with one of the coolest headlines we have had in a while. You can access the digital version of this at cleanfax.com and use the “Magazine” menu button. The topic was about the pros and cons of being part of a TPA network—a very fair and honest article.

That spawned continued discussion as I heard from many of you how you valued the content and how it provided you with the information you needed to make an educated decision. This led to a TAKE 5 With Cleanfax interview with Cisney, one you can view below. Give it a watch. There is more information there that complements the article.

The bottom line

The industry seems divided over TPAs. You either stand against them or tolerate them, Cisney said. And some embrace them completely. But like many things in life, there’s usually a middle ground.

Cisney explained that his daily interactions often revolve around this topic. When a client approaches him about joining a TPA, he transparently lays out the pros and cons. He observes that some firms may balk at a TPA dictating pricing or operational strategies, while others value its stability and revenue stream.

For budding companies, the scenario is somewhat different. Established TPAs might require a business to operate for at least three years, leaving new entrants searching for alternatives. Nate did say that there are TPAs more flexible about their joining criteria. They’re eager to expand their contractor networks.

“I see TPAs only growing, based upon the current environment and the current trend that I see,” Cisney elaborated. “I’m currently working with two or three TPAs that are coming out, that are on the market now, and I think that number will continue to grow, because it is the one way that insurance companies can dictate the outcome of a claim much better if they are on a TPA than if they are not. And we know insurance companies like to dictate and control as much as possible.”

As the restoration industry evolves, professionals will continue weighing their options and making decisions best suited for their company’s trajectory. The key, as always, lies in informed decision-making.