Understand the Third Party Administrator in Health Insurance (TPA)
Updated On Jan 24, 2024
The most commonly used term in insurance is third-party administrator. What is a third-party administrator in insurance? Third Party Administrator also known as TPA acts as an interface between the insurer and the policyholder. It is a company/agency/organization that operates under the license of the Insurance Regulatory and Development Agency (IRDA). TPA is hired by the insurer to provide processing of claims in a cost-effective, timely, and hassle-free manner. One TPA can be associated with multiple insurers. Mostly TPA works as a unit of health insurance companies, but in some instances, they also work independently. TPA in health insurance helps in claim assistance, processing claims, and providing cashless facilities to the policyholder. The TPA team consists of the following:
- in-house medical doctors (registered with the Medical Council of India)
- insurance consultants
- legal experts
- hospital managers
- management consultants
- information technology professionals
Table of Contents
What is Third-Party Administrator Work?
Third Party Administrator is a third-party entity, which is licensed by IRDAI ( Insurance Regulatory and Development Authority of India) to offer insurance providers management solutions. TPAs act as an intermediate between the policyholder and the insurance provider to facilitate the smooth settlement of reimbursement claims and cashless claims. At the time of requirement of any healthcare treatment by the policyholder, they would get in contact with the TPA of the insurer. Then, the TPA would inform the policyholder regarding the network hospital nearest to them and would also further help them with the claim procedure. All the medical bills will be sent by the hospital to the TPA for payment during the discharge of the patient. Afterwards, the TPA would investigate, and verify all the bills against the pre-decided rates. Later, after the approval of bills and documents, the expense will be settled by the insurance company directly.
Role of Third Party Administrator
The role of a third-party administrator in health insurance is as follows:
1. First Point of Contact between the Insurer and Policyholder
Third-party administrators in health insurance companies act as an intermediary between the insurer and the policyholder. In case of any claim-related issues, the insurer contacts the concerned TPA.
2. Maintaining Policyholder Records
After the policy is issued, all the records related to the insured are transferred to the TPA. TPA maintains the database of policyholders and assumes almost all responsibility for the insured. An identity card with a unique identification number is issued to the policyholder by the TPA.
3. Claim Settlement
Among the various third-party administrator services, this is one of the most important functions of TPA. TPA coordinates with the hospital for the claim settlement process. The hospital shares the bills related to the treatment of the policyholder. The TPA team crosschecks it according to the terms and conditions of the policy. In case TPA has doubts regarding any claim, it can go for a second opinion or can also investigate hospital records.
4. Cashless Processing
When a policyholder receives treatment in-network hospitals, a third-party administrator assists with the cashless processing of the claims. All the documents related to the availed treatment are provided to the TPA. The documents are verified by the TPA and then the bills of the hospital are paid as per the policy cover. One thing to note, for cashless processing, you need to visit the network hospitals that fall under your insurer. Opting for a cashless claim depends on you and is not compulsory.
5. Empanelling Hospital in the Network
A third-party administrator in medical insurance is responsible for building a hospital network for cashless services. While empanelling a hospital in the network, it takes into account the infrastructure, facilities provided by the hospital, its track record, etc. When you buy a health policy, you are provided with a kit containing a guidebook and a List of Network Hospitals. Moreover, you can also get to know about the network hospitals from your third-party administrator for hassle-free cashless treatment.
6. Maintaining Service Centre
Last but not least function of a third-party administrator is to maintain a 24-hour full-fledged customer care centre where the policyholder can call and get their queries answered. Any queries related to health insurance policies, eligibility, claim settlement process, status related to claim settlement, network hospitals, etc. are handled by these service centres. These service centres can be accessed from anywhere in the country.
7. Add-on Facilities
In addition to the above, third-party administrators in insurance also help with add-on services such as ambulance services, bed availability, lifestyle management, supplies related to medicine, health facilities, etc.
Benefits of Third Partry Administrator in Health Insurance
The benefits of having a third-party administrator health insurance are as follows:
1. Easy Accessibility
The 24-hour customer service provided by the TPA helps with better availability of services. Anytime, the policyholder has any query related to his health insurance policy; he can contact TPA and get it solved right away.
2. Standardized Procedure
There is a standardization of the process by TPA health insurance. The TPA team possesses a specialized skill set and technology. Every process of health insurance is carried out with due diligence. TPA develops protocols to streamline the investigation and avoid any delay in claim settlement.
3. Greater Reach and Penetration
Due to the involvement of third-party administrators in the health insurance industry and better services provided, people are becoming more and more aware of the benefits of health insurance.
4. Fewer Chances of Fake Claims
The team TPA consists of professionals from various verticals. It helps in improving the quality of service and avoiding fake claims. It restricts unnecessary treatments and minimises the expenditure of the insurer. It also increases the knowledge base of health care services.
List of some of the Third Party Administrators in India
The list of Third-party administrators is as follows:
- Alankit Insurance TPA Limited
- Anmol Medicare TPA Ltd.
- Anyuta TPA in Healthcare Pvt. Ltd.
- Dedicated Healthcare Services TPA (India) Private Limited
- East West Assist TPA Pvt. Ltd.
- E Meditek (TPA) Service Ltd.
- Ericson TPA Healthcare Pvt. Ltd.
- Family Health Plan (TPA) Ltd.
- Focus Healthservices TPA Pvt. Ltd.
- Genins India Insurance TPA Ltd.
- Good Health TPA Services Ltd.
- Grand Health Care TPA Services Private Limited
- Health India TPA Services Private Limited
- Health Insurance TPA of India Ltd.
- Heritage Health TPA Pvt. Ltd.
- MD India Healthcare (TPA) Service (Pvt.) Ltd.
- MedSave Health Insurance TPA Ltd.
- Medi Assist India TPA Pvt. Ltd.
- Medicare Insurance TPA Services (India) Pvt. Ltd.
- Paramount Health Services & Insurance TPA Pvt. Ltd.
- Park Mediclaim Insurance TPA Pvt. Ltd.
- Raksha Health Insurance TPA Pvt. Ltd.
- Rothshield Healthcare TPA Services Limited
- Safeway TPA Service Pvt. Ltd.
- Spurthi Meditech (TPA) Solutions Pvt. Ltd.
- Sri Gokulam Health Services TPA Pvt. Ltd
- United Healthcare Parekh Insurance TPA Pvt. Ltd.
- Vidal Health TPA Pvt. Ltd.
- Vipul MedCorp TPA Pvt. Ltd.
Conclusion
There are several challenges to the effective functioning of the TPA, such as low awareness about TPAs, dependence on insurance agents, additional expenditure, etc. However, the involvement of third-party administrators in health insurance processes like claim settlement, cashless processing, 24-hour customer service, etc. outweighs any such challenges. So, harness the benefit of TPA and enjoy timely and cost-effective processing of your health insurance claim.
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