Questions Submitted by the Public, by Date Posted to the Website. When a third-party administrator (TPA) is/is not a covered entity


Many self-insured group health plans use third party administrators (TPA's). These TPA's are not covered entities. Are all electronic transactions between a self-insured group and its TPA outside the scope of the transaction requirements?


If the self-insured group health plan uses a TPA to conduct all or part of a transaction on behalf of the health plan, the TPA is acting as the business associate of the health plan. In order to determine whether a transaction between the health plan and its TPA must be a standard transaction, it is necessary to look at the description of the transaction in 45 CFR 162, Subparts K through R. The health plan, as a covered entity, must use the standard when transmitting a transaction as described in Subparts K through R with another covered entity or within itself. The health plan must also require its TPA, as its business associate, to follow the rules and transaction standards applicable to the health plan as though the health plan were performing the functions itself. This means that in cases where the health plan would be required to use a standard transaction within itself, the transaction would have to be standard when conducted between the health plan and its TPA.