Certified Revenue Cycle Representative (CRCR) Practice Exam

What does a Third-party administrator (TPA) do?

1. Conducts audits for healthcare services

2. Provides services associated with utilization review and claims payment

3. Sets pricing for medical procedures

4. Acts as a healthcare provider

The correct answer is: Provides services associated with utilization review and claims payment

A Third-party administrator (TPA) plays a crucial role in the healthcare system by providing services that are essential for the management of health benefits and insurance claims. The primary function of a TPA includes handling claims processing, which involves assessing and processing insurance claims made for healthcare services. This includes verifying coverage, determining payment amounts, and often managing the overall claims payment process. In addition to claims processing, TPAs are also involved in utilization review, which assesses the necessity and efficiency of healthcare services received by patients. This helps ensure that the services provided align with best practices and are cost-effective. By performing these functions, TPAs help mitigate administrative burdens for healthcare providers and insurance companies, allowing them to focus on their core operations while ensuring proper payment mechanisms are followed. Understanding the role of a TPA is essential, especially in the context of the revenue cycle, as their actions directly impact revenue flow and healthcare service delivery. This insight emphasizes the significance of their role in ensuring that healthcare providers receive timely and accurate payments for the services they deliver, ultimately supporting the sustainability of healthcare operations.