Self-insured employers often face a web of fees from their third-party health plan administrator that extend beyond the base rate and can be unclear at the time of contract signing, according to a study published Aug. 13 in Health Affairs Scholar.
Researchers at RAND and the University of Southern California conducted 22 semi-structured interviews with 34 participants during the fall of 2025, drawn from four groups nationwide. Those groups included employers and employer coalitions, TPAs and their partners, benefit consultants and brokers, and legal and policy experts. The study acknowledged that its findings don’t establish the prevalence or overall magnitude of the extra fees that exist across the self-insured market.
According to the interviewees, the administrative fee is the number employers focus on most when comparing TPA vendors, even though it rarely reflects the full cost. Multiple participants said that dynamic creates an incentive for TPAs to keep the administrative fee low and generate revenue through other means.
There were two main pathways identified to address the TPA fee landscape, but each is facing headwinds. The first is expanded transparency, with the Consolidated Appropriations Act of 2026 extending compensation disclosure requirements to TPAs and PBMs, beginning in 2028. The second is clearer fiduciary accountability, with California and Indiana recently enacting laws that define PBMs and TPAs as fiduciaries. However, multiple interviewees warned that market consolidation may limit the practical impact of either approach.
Five additional TPA fee types the study identified:
1. Percentage-based shared savings fees on out-of-network claims were the most widely cited additional fee. Interviewees described a process where TPAs and repricing partners negotiate down out-of-network charges and then collect a percentage of the difference between the billed rate and the paid amount. One legal and policy expert described a scenario in which a $100,000 claim was negotiated down to $1,500, but $30,000 in fees was added, with the full $31,500 showing up as the cost of the claim. The interviewee said the plan sponsor would not necessarily know that $30,000 of that amount was a fee.
2. Interviewees discussed TPAs going back to recover alleged overpayment errors and then charging a percentage of the recovered amount as a fee, in both pre- and post-payment scenarios. Several respondents questioned the logic of TPAs collecting fees on errors the TPA itself may have enabled.
3. One independent TPA participant highlighted a process where a large carrier whose network was rented for specific employers would take the paid amount and apply a 3% to 5% fee for “network access,” thereby reducing the amount that ultimately reached providers.
4. There’s a wide array of “a la carte charges” that can include fees for employers to access or audit their own claims data, sometimes with restrictions on the number of claims they can review per month or limitations on which auditors can be used. Other examples include reporting fees, fraud and waste review fees, clinical program add-ons and litigation fees tied to the No Surprises Act’s arbitration process.
5. Legal and policy experts described a practice where a TPA recoups an alleged overpayment to a provider from one plan by withholding or reducing payments owed under a different plan, sometimes across different funding arrangements.
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