TPAs in Health Insurance - All You Need to Know

What are TPAs in Health Insurance?

In health insurance, TPA stands for Third Party Administrator. It basiclally refers to a person or an organisation that helps to process claims raised under a mediclaim policy. They are independent third parties who may act on behalf of the insurer to assist in administrative tasks related to mediclaim policy such as settlement of claims. In simple words, TPAs serves as a bridge between the health insurance provider and the policyholder.

Under health insurance, the scope of coverage is wide and its claim settlement involves verifications and internal processing. TPAs keep a track of health insurance claim settlement work on behalf of insurance companies and maintain quality of services. All in all, TPAs look after the payment of your hospital bills and claims made under a health policy.

All TPAs are licensed by the Insurance Regulatory & Development Authority of India (IRDAI). Moreover, one TPA can be associated with multiple insurance companies at the same time.

Role of TPA in Health Insurance

Take a look at the key role of Third Party Administrators in health insurance:

1. Smooth Settlement of Claims

   The major role of a TPA is to expedite the processing and settlement of claims. In case of a cashless claim, the network hospital coordinates with the TPA to seek pre-authorisation for the insured's treatment. It is the TPA's job to cross-check if the documents submitted by the policyholder are sufficient to administer the claim. In fact, the TPA can ask the policyholder to provide additional information, if needed.

2. Issuance of Health Cards

   A TPA in health insurance is responsible for issuing the authorised health card to the policyholder to validate the issuance of the policy. This card contains details of the policy & the policyholder, and needs to be shown at the hospital during hospitalisation to intimate a claim.

3. Maintenance of Records

   In case of hospitalisation, TPAs are responsible for keeping a record of the crucial information related to the insured. Doing so unburdens health insurance companies from maintaining such records for future references.

4. Arrangement of Value-Added Services

   A third party administrator also assists in arranging value-added services for policyholder, such as ambulance service, wellness programmes, referral to surgeons/specialists, etc. The insured can call his/her TPA to avail value-added services covered under their policy.

5. Claim Assistance

   Policyholders can call their TPAs in case they require any kind of claim-related assistance, such as claim intimation, document submission, claim status, etc. TPAs provide full-fledged customer support and answer the queries of the policyholders. A person can reach out to his/her TPA 24x7 from any part of the country.

6. Build a Strong Network of Empanelled Hospitals

   Third Party Administrators help the insurance company to build a strong network of empanelled hospitals. They try to enrol the best hospitals with the insurance provider that can arrange cashless services quickly and allow rate negotiation.

How TPAs Work?

Third-Party Administrators assist in processing health insurance claims. Let us understand their functioning through two scenarios:

1. Cashless Treatment

   • If you need medicare, you can visit a hospital within your insurer's network.
   • The hospital shares treatment details and estimated costs with the TPA.
   • The TPA checks your eligibility and coverage under your health insurance policy.
   • Once verified, the TPA grants pre-authorisation, allowing you to receive treatment without any upfront payment.
   • After the treatment, the TPA settles the payment directly with the hospital on behalf of the insurer.

2. Reimbursement Treatment

3. If you get treated at a non-network hospital, you have to pay the bills yourself first.
4. Later, you submit all necessary documents, including bills, to the TPA to file a reimbursement claim.
5. The TPA verifies the documents and forwards the claim to the insurer for approval.
6. Upon approval, the TPA reimburses the amount to you, either via cheque or direct bank transfer.

Advantages of TPA in Health Insurance

Here are the key benefits of third party administrators in mediclaim insurance:

• Facilitate in efficient settlement of cashless claims
• Help in submitting the right claim documents
• Improve the claim service quality
• Available 24X7 for customer assistance
• TPAs do not charge for the services offered
• Helps in processing a large number of health claims efficiently.

What Is the Difference Between a TPA and Insurance Provider?

A Third-Party Administrators (TPAs) serve as a bridge between the insurance company and the policyholder. They focus on delivering administrative support such as processing claims, handling documentation tasks, managing premium collections, and providing customer service. TPAs ensure the claim process is smooth and hassle-free for policyholders.

In contrast, an insurance company is a business entity that provides health insurance coverage to individuals, families, and groups in exchange for a premium. These companies design and sell health insurance plans, manage the financial risk associated with healthcare expenses, and offer multiple benefits like hospitalisation coverage, critical illness coverage, etc.

List of TPAs for Health Insurance

Check out the list of IRDAI-licensed Third Party Administrators:

Cancellation of TPAs in Health Insurance

A TPA is chosen by the insurance company and the TPA itself does not have a say in being appointed or dismissed. However, a policyholder can cancel the existing TPA and request the insurance company for another TPA. Follow the steps given below to cancel your health insurance TPA:

Step 1: Get in touch with your insurance company over the phone or via email.

Step 2: Share the details of your policy, including your policy number.

Step 3: Request for cancellation of the existing TPA with the reason for cancellation.

Step 4: The insurance company will either approve or reject the cancellation request.

Step 5: If approved, choose another IRDAI-licensed TPA.

Whom to Contact for TPA Service-related Issues?

In case you are facing any service-related issues with your Third Party Administrator, then you need to contact your insurer instead of your TPA. This is because insurance companies are responsible for informing their customers about any changes related to TPAs. For instance, if the TPA is taking more than two to process your claim even after submitting all your documents, then you need to contact your insurer.

You may also like to read: What is Health Insurance

FAQs