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What Is The Role Of TPA In Health Insurance?

Published On Sep 04, 2022 12:00 PM By InsuranceDekho

Third-Party Administrators (TPAs) are organisations responsible for processing insurance claims covered by medicare. These administrators are often independent, but they have the ability to behave as if they were a part of the insurer or insurers. These organisations have an insurance regulatory IRDAI licence.

What Is The Role Of TPA In Health Insurance?

Features of Third Party Administrator (TPA)

Below are some of the functions of TPA:

  • In the event of a claim, TPA serves as the intermediary between the insurer and the policyholder.
  • An insurance company for health care selects TPA.
  • By handling the paperwork and paying the hospital expenses, TPA streamlines the claims process. The Insurance Regulatory and Development Authority of India issues TPA licences.
  • TPA may be connected to different policyholders.
  • These are linked to a quick settlement process.

Understanding Third Party Administrator In Health Insurance

The number of insurers, the variety of health products available, and the number of customers all increased significantly over time. Eventually, it became challenging to maintain track of work that did not produce quality services. As a result, the Third Party Administrators were developed by IRDA.

Every insurance provider names a TPA to handle your service. You are not required to pay the administrator directly. A TPA has the option of approving a cashless claim settlement or deferring payment. However, the owner of the health insurance policy will never contact the TPA directly with a complaint or question.

Role of TPA In Health Insurance

The following points will help you understand the role of TPA in health insurance:

  • Maintenance of Records: When policyholders are hospitalised as patients, TPA assists in retaining important records pertaining to such policyholders.
  • Settlement Of Claims: During cashless claim settlement, TPA makes sure that the hospital and insurance company are coordinated smoothly. TPA provides the necessary back-end support in such circumstances.
  • 24/7 Customer Service is available from the majority of TPAs, allowing policyholders to contact them at any time.
  • Full-Time Assistance: The majority of TPAs offer a customer support system that is available around-the-clock so that policyholders can ask questions and receive answers.
  • Additional Services: The majority of TPAs also provide policyholders other services like extra beds, ambulances, medical supplies, etc.

Relation of Policyholder and TPA

A TPA serves as a go-between for the insurance provider and the policyholder. Their responsibility is to streamline the health insurance claim process. As far as we are aware, claims can be classified as either reimbursement or cashless.

The policyholder goes to the hospital as soon as they require medical or emergency treatment. A claim becomes valid if the person is asked to stay in the hospital for at least 24 hours (for an illness that isn't specifically stated, like cataracts).

In this situation, the policyholder will inform the TPA or insurer about the admission and the requirement for the treatment. The TPA will next request that, if possible, the hospital make arrangements for a cashless facility. If not, the claim will be handled for payment. If cashless payment is permitted, the hospital will submit all invoices to the TPA after the treatment is finished. If not, the policyholder will need to complete the paperwork at a later time.

The TPA officials will examine the invoices and other documents before allowing the settlement of the claim. In a cashless transaction, the hospital will receive money. But for the purpose of reimbursement, the policyholder will pay the costs through the insurance provider.


The benefit of the TPA is succinctly and precisely defined in the job. It aids the insurer's settlement procedure. It offers service seven days a week and takes care of all the technical issues, including managing documents and giving out IDs.

Also Read: 

Health Insurance With Maternity Coverage: An Important Tool To Enjoy Motherhood

Key Things To Ask Before Buying A Health Insurance Plan


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 regard.

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