For insurance TPAs (Third-Party Administrators), the word modernization often triggers concern.

It sounds expensive. It sounds risky. And it usually sounds like a core system replacement.

Claims platforms like Guidewire, legacy claims engines, and internally built tools are deeplyembedded into TPA operations. They touch compliance, carrier reporting, and dailyworkflows. Replacing them is not only unrealistic, it’s often unnecessary.

The reality: modernizing claim payments does not require a rip-and-replace strategy.

Payments Are A Huge Bottleneck

Most TPAs have already modernized large parts of the claims lifecycle:

● Digital claim intake
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● Automated adjudication

● Centralized documentation

● Rule-based approvals

But when a claim is approved and money needs to move, many organizations still rely onoutdated processes:

● Paper checks

● Manual approval handoffs

● Disconnected bank portals

● Spreadsheet-driven reconciliation

This disconnect creates a hidden bottleneck. Even with a modern claims system, paymentsremain slow, manual, and opaque.

For claimants and vendors, this feels like a delay.

For carriers, it looks like inefficiency.

For TPAs, it becomes operational drag.

What “Modernizing Claim Payments” Actually Means

Payment modernization is often misunderstood.

It does not mean replacing your claims system.

It does not mean rebuilding financial infrastructure.

And it does not mean forcing every payee into a single payment method.

For TPAs, modernizing claim payments typically means:

● Digitizing disbursements (ACH, same-day ACH, digital delivery, check fallback)

● Automating payment approvals and release workflows

● Centralizing visibility into payment status and reconciliation

● Preserving the existing claims system as the system of record

In other words: payments become a connected layer, not a replacement layer.

The Layered Integration Model TPAs Are Adopting

Leading TPAs are modernizing payments using a layered architecture that cleanly separates responsibilities:

●  Claims system: Continues to adjudicate claims and authorize payment amounts

● Payment platform: Orchestrates approvals, delivery methods, and disbursement logic

●  Banking rails: Move funds securely via ACH, digital, or check-based workflows

● Reporting & reconciliation layer: Syncs payment data back to finance, operations, and carriers

This model allows TPAs to modernize incrementally without destabilizing core systems orcarrier integrations.

Why This Approach Works

This layered approach delivers immediate impact without long implementation cycles.

TPAs that modernize claim payments this way typically experience:

● Faster payouts to claimants, vendors, and service providers● Reduced operational overhead and manual handling

● Fewer reconciliation errors and exceptions

● Improved carrier satisfaction and trust

● Stronger auditability and compliance postureMost importantly, it removes friction at the last mile of the claim lifecycle — the momentwhen value is delivered.

Why Core System Replacement Is the Wrong Goal

Claims systems are built to:

● Decide what should be paid

● Determine who should be paid

● Enforce coverage and rules

They are not built to:

● Orchestrate complex payment delivery

● Manage multiple disbursement methods

● Handle banking exceptions and reconciliation

● Optimize claimant payment experience

Trying to force payment logic into claims systems creates complexity, not efficiency.

The Bottom Line

Insurance TPAs do not need to replace their core systems to modernize claim payments.

They need a payment platform purpose-built for insurance workflows, one that integrates cleanly with existing claims systems, respects established processes, and removes friction where money actually moves.

That’s how modern TPAs scale faster, serve carriers better, and deliver better claimant experiences without blowing up their technology stack.

Platforms like SnapRefund’s ClaimsSnap, exist specifically to solve this last-mile problem bymodernizing claim payments around core systems, not instead of them.

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