Administrative fees: What’s included and how to maximize value

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Administrative fees and services can mean different things to different people. And so can the all-inclusivity and transparency on what a third-party administrator provides as a part of their base administrative fee.

Consider this example.

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An infographic titled “Based on your business needs, which administrator will provide the best value?” compares Administrator A and Administrator B across cost and service offerings.

The table lists a series of health plan support services and indicates whether each administrator provides them. Administrator A is highlighted in a light blue column and has check marks for all listed services, while Administrator B displays X symbols indicating those services are not included.

Comparison details:

• Base fee
  • Administrator A: $40 PEPM (per employee per month)
  • Administrator B: $30 PEPM
• Nurseline
  • Administrator A: Included
  • Administrator B: Not included
• Treatment decision support
  • Administrator A: Included
  • Administrator B: Not included
• Analytics reporting
  • Administrator A: Included
  • Administrator B: Not included
• Emergency room decision support
  • Administrator A: Included
  • Administrator B: Not included
• Readmission support
  • Administrator A: Included
  • Administrator B: Not included
• Telemedicine
  • Administrator A: Included
  • Administrator B: Not included

The graphic uses dark blue headings, gray text, and a clean table layout on a white background. The design emphasizes that although Administrator A has a higher monthly fee, it includes a broader set of employee support services.

Am I still getting what I want for the price I want?

While the base price is often what gets advertised, you might end up paying a higher total amount depending on which services you want or need.

In the example, Administrator B has a lower base fee. But many of the services your organization may find valuable aren’t included in that fee, which could mean that Administrator A has the better value based on your needs.

Why knowing what's included in a base fee is important

With health care spending exceeding $4.9 trillion per year in the U.S., both individuals and businesses are looking for ways to manage costs. Knowing exactly what you’re paying for helps you effectively and accurately budget, and avoid unexpected extra costs.

Questions to ask when reviewing contracts

As you’re reviewing your current and prospective contracts — whether it’s by yourself or with the help of a consultant or sales representative — consider the following questions:

• What’s detailed in our contract?
• What’s included in the administrative base fee?
• What’s considered ala carte and what are those costs?
• What services are we currently paying for and why?
• What type of reporting, requests or services will we want our administrators to provide that may cost us more money in the future?
• Are these common fees currently built-in with our claims and we just haven’t noticed?
  • Hospital bill review
  • Hospital bill
  • Audit of fraud and abuse
  • Overpayment recovery
• What are our total dollars spent, and what services are we getting for it?

Some costs and fees are included for things you might not even see, such as share-of-savings costs, unless you look at each bank draft carefully or undergo a deep claims analysis. At the end of the day, examine what the services you anticipate your employees needing will be and how they impact your total administrative costs.

Now you can be an even smarter administrator by digging into the fine print to know what you’re paying for and potentially lower your overall costs — while still getting all the value you and your employees need.

Reach out to your authorized Wellmark representative to learn more about everything included in administrative services.