Three Critical Third-Party Administrator Performance Indicators to Evaluate

Why Metrics Matter in TPA Selection

In today’s crowded Third-Party Administrator (TPA) market, self-funded employers and brokers face no shortage of options. What truly sets a dependable partner apart is measurable, reliable performance year after year. Before entering any partnership, brokers should look closely at three key performance indicators (KPIs):

• Year-over-Year Renewal Stability
• Average Savings
• Claims Turnaround Time

These benchmarks separate TPAs that deliver real results from those who only claim to.

Year-over-Year Renewal Stability

When choosing a TPA partner, looking at retention rate over time is one of the clearest indicators of trust and consistent performance. Renewal stability reflects how reliably a TPA meets expectations, even through market fluctuations or challenging claim years.

When assessing a potential partner, request multi-year renewal data or ask about client retention rates. Steady retention points to lasting value and responsive service, while irregular renewal patterns may indicate communication gaps or uneven results.

Average Savings (vs. Benchmark or Expected Claims Costs)

Savings are the foundation of any self-funded program, but meaningful results come from more than numbers on paper. The true test is whether those savings stay consistent and hold up against benchmarks over time.

When evaluating potential TPAs, ask for historical results, preferably audited, that show their ability to lower claims costs year after year. Verified data confirms that their repricing, network, and cost containment strategies deliver as promised.
At ACS Benefit Services, we’ve seen how specialized cost-containment programs, including dialysis carve-outs, show how a focused approach can drive sustainable savings and long-term value.

Claims Turnaround Time

Efficiency in claims processing is one of the clearest ways a TPA impacts both employers and members. A strong partner consistently processes and pays claims quickly and accurately, reducing confusion and minimizing disruptions for plan participants.
When evaluating a TPA, ask for their average claims turnaround time and compare it against industry standards. Look not only at speed, but also at accuracy. Fast processing is only valuable if the claims are paid correctly the first time. Consistently low turnaround times paired with high accuracy rates indicate a TPA with reliable systems, responsive service, and a commitment to client satisfaction.