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All About Third-Party Administrator TPA in Health Insurance

Updated On Jul 02, 2021

Health insurance is given by the insurer to curb the financial load on an individual at the time of a mishap or an accident. Without health insurance, all the charges of medical bills, hospitalization, and doctor consultation go from the pocket of the individual, which creates financial tension and leads to a poor budget.

If you have health insurance, then all the money matters are handled by the insurer. Unfortunately, if you ever come across an accident or a mishap, and face problems in claiming the amount from your insurance then all you need to do is inform your third-party administrator, and it will be fixed.

All About Third-Party Administrator TPA in Health Insurance

What Is A Third-Party Administrator Or TPA?

A third-party administrator or TPA is an agency or organization which holds a license from the Insurance Regulatory Development Authority (IRDA) to process claims and retail policies and provide a cashless facility as an outsourcing entity of the insurer.

Every insurance company appoints a TPA for the policyholder. Let us look at the aspects handled by the third-party administrator:

  • Share knowledge of the healthcare services
  • Improve the quality of the service
  • Manage and investigate the claims
  • Observe cashless and reimbursement TAT
  • High-quality consistent services
  • Processing large amount of health insurance claims

Roles Played By A Third-Party Administrator in Health Insurance

A TPA acts as an intermediary between the policyholder and the insurance company. The following are the roles and responsibilities played by the TPA:

  1. TPA acts as an intermediary and is the key to process the claim and settlements.
  2. They have the responsibility to issue ID cards to the policyholders to avail cashless facilities in a hospital.
  3. At the time of the mishap, the policyholder must intimate the TPA, which will direct the policyholder to the hospital they have a tie-up with.
  4. They send the necessary and required documents like bills to claim from the insurer.
  5. A TPA issues an authorization to the hospital for tracking for the medical case, at the end of which the bills are sent to the insurer.

Apart from the above-mentioned roles, a third-party administrator has many other duties to abide by.

How Does The TPA Help A Health Insurance Policyholder?

The widest and most important significance of the TPA is to make the process of claim settlement easy. At the time of the accident, the TPA is informed by the policyholder and then, all the documents and bills are sent to the insurer by the TPA. there are two types of claims:

  1. Cashless
  2. Reimbursement

A cashless claim is made when the policyholder visits the hospital that has a tie-up with the insurer. If it is not a tied-up hospital the payment is made in reimbursement by the insurance company.

Challenges With The TPA

TPA ensures smooth functioning in the process of claim settlements. However, there are certain challenges with the concept of TPAs:

  • Lack of awareness about the third-party insurers among the policyholders.
  • To deal with all the queries and problems of the policyholders, a TPA must be experienced in the administration work. Lack of experience or knowledge might not be able to help the policyholders in their settlements.
  • Weak networking of the TPAs
  • Asymmetry of the information
  • Sometimes the whole concept of the TPAs is not defined as there might be a delay in the process of the claim settlements
  • Inadequate staff personnel.


If you face any issues or problems in claiming the settlement for your health insurance policy, you must contact your third-party administrator as they act as the stakeholders in this whole process and hence, are obliged to help you in the smooth functioning of this process.
They enhance the quality of the services offered by your health insurance policy and gives you cost-effective benefits.

Hence, you must take a health insurance policy for yourself and your loved ones. In case of emergencies, do not forget to inform the TPAs, so that they can begin the proceedings for a hassle-free claim settlement process.

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Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this

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