TPA in Health Insurance

Third-Party Administrator TPA is an IRDAI approved organization (since 2001) that acts as an intermediary between the insured and insurer to smoothly process the health insurance claims. They function as outsourced entities that offer claim-assistance and help in other activities on behalf of the insurer. From searching for the nearest network hospital to submitting the required documents for claim settlement, TPAs assist the policyholders and the insurers in every step of the journey.

Read along to find more about TPAs.

What is TPA in health insurance?

Third-party administrators aid customers in the hassle-free purchase of health insurance plans, and claim-related issues in health insurance. Third-Party administrators are licensed entities chosen by a health insurance company and licensed by (IRDAI) to sell health insurance policies to customers. It is a one-point contact for all insurance plan-related queries and claim settlement requirements for the customers and makes sure that there are no delays in claim processing when it is most needed by any customer. TPAs are intermediaries between insurance holders and insurance providers.

TPAs primary focus is usually claim settlement but some TPAs also provide value-added services such as road ambulance, hospital beds, doctor consultation, overall healthcare programs, pharmacy service, 24x7 helpline services, lifestyle management, data management, and more.

What is the Role of TPA in Health Insurance?

TPAs play an important role in the health insurance industry and provide excellent service to policyholders. Policyholders can always rely on Third Party Administrators for all pertinent information about their health insurance policy. Here are a few examples of how a TPA can assist you.

How TPA helps Policyholders?

TPA helps policyholders in multiple ways

Whats the importance of third-party administrators (TPA) to insurance companies?

Insurance companies partially rely on TPAs for smooth settlement of claims. Other reasons as to why health insurance companies need TPAs are listed below:

• Having a dedicated institute to facilitate claim settlement.
• Co-ordinating the complete process (from treatment to discharge).
• Proper management and investigation of claim requests.
• Better quality of services.

What are the Benefits of TPA to a Policyholder?

A policyholder can profit from a TPA in the following manner:

• Avail faster and focused claims management.
• Ambulance services.
• 24-hour toll-free helplines.
• Grab a list of trusted network hospitals of a respective insurer.
• Tracking claims.
• Increase the knowledge base of healthcare services.

Health Insurance Companies

How does TPAs work?

TPAs play an important role in an easy settlement of health insurance claims. They are the major support system of the insurer as they undertake crucial responsibilities on behalf of them. Lets understand the working of a TPA with the help of the below example:

Ramesh works in Genpact. His wife is diagnosed with a kidney stone and the doctor suggests an immediate operation. He has taken a health insurance policy from HDFC ERGO General Insurance Company. Below are two cases, which will showcase the role of TPAs in health insurance.

1. Case 1: Cashless Treatment

   Ramesh plans to go for cashless treatment, gets in touch with the respective TPA of HDFC ERGO, and selects a suitable network hospital with their guidance. At the hospital insurance desk, the TPA guides Ramesh to submit the required documents to avail of the treatment. After approval, the assigned TPA settles the treatment expenses with the hospital.

2. Case 2: Non-Cashless Treatment

   Due to some reason, Ramesh decides to visit a non-network hospital. He informs the assigned TPA regarding the same, gets the treatment done, and pays the bills. After discharge, Ramesh files for reimbursement. The TPA guides him with the list of required documents for submission. After the approval, the insurer transfers the claim amount to the registered bank account.

List of TPAs in India.

According to the IRDAI circular, the policyholder can choose a TPA of his/her choice from a list of TPAs engaged by the insurer. Below is the list of TPAs available in India:

What are the limitations of TPAs?

Though TPAs are quite useful, they do struggle with a few limitations. Here they are-

• Since TPAs are not the actual health insurance providers, they may not have adequate information.
• Customers often get confused between agents and TPAs.
• As TPAs are middlemen, they dont have a major say in claim settlement.

To sum it up…

TPAs not only make our claim settlement journey easier but also increase our knowledge base of healthcare services. Both the parties (insurer and insured) can easily profit from them if used correctly.