A crucial item to be managed, of course, is the actual dollars paid out on claims. After all, every claims process must at some point deal with money. When discussing the money associated with claims, remember that it is all parasitic money, bad money. There are four kinds of bad moneyidle money, excessive money, fraudulent money and someone else's money. If a TPA is on its toes, it has the tools to manage all four.
Idle money sits in a bank waiting to be paid.
Early in their development, TPAs got this money from their clients so that they could pay the bills as they came in. The problem was that this money often sat untouched in a funding account to no one's benefit except the bank. And if it sat there long enough, it reverted to the state. This simply means that the account from which it pays has nothing in it until the checks are actually cut and mailed. Once the TPA knows the exact amount needed, it arranges with its clients to fund the account in that amount.