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TPA in Health Insurance

Health emergencies can knock on your door at any point in life, draining your hard-earned savings which is why having health insurance becomes essential. Now, while buying a health insurance plan, you need to be aware of certain terminologies, TPA, being one of them. A Third Party Administrator (TPA) is a body that processes insurance claims admissible under health insurance. When a health insurance claim occurs, the TPA acts as intermediary between the insurer and the insured. Read on to learn more about it.

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What is Third Party Administrator in Insurance?

As there are health insurance companies to purchase health insurance plans, similarly, there is a TPA to fix claim-related issues in health insurance. It is a licensed outsourcing entity chosen by a health insurance company and licensed by the Insurance Regulatory and Development Authority of India (IRDAI).

Importance of TPA Insurance in Health Insurance 

A health insurance Third Party Administrator (TPA) takes care of the hospital bills and other related expenses so that the patient is taken good care of by friends and family members. TPA is responsible for the following:

  • Processing a good number of health insurance claims
  • High-quality consistent services
  • Observe cashless and reimbursement TAT

What is a Third Party Administrator in Health Insurance?

A Third Party Administrator of TPA is an agency or a company or an organization that holds a license from the Insurance Regulatory and Development Authority of India (IRDAI) to process health insurance claims in addition to providing cashless facilities as an outsourcing entity of an insurer. TPAs work as intermediaries between an insurance company and the insured. So, the concerned parties include insurance companies, policyholders, and healthcare providers.

TPAs handle some of the most important aspects of health insurance. Some of these include processing of health insurance claims (accepting requests, approving cashless claims, and disbursing the claims), provider network, utilization review, enrolment, premium collection, cashless processing (if the treatment is availed at network hospital), value-added services like ambulance services, availability of beds, specialized consultation, wellbeing programs, medicine supplies, 24-hour toll-free helplines, lifestyle management, health facilities, and medical supplies, and database management.

As the experts say, it should be the prime service of TPAs to provide cashless hospitalization to the insured. You must also be informed that not all health insurance companies have TPAs. Some of them also have a separate department that performs the functions of TPA instead of outsourcing it to another entity.

Here are a few things that you must always keep in mind regarding TPA:

  • The Third Party Administrator acts as a bridge between the insurance company and the policyholder when the claim is made.
  • The Third Party Administrator is selected by a health insurance company.
  • The Third Party Administrator is licensed by the IRDAI or Insurance Regulatory and Development Authority of India.
  • The key objective of the Third Party Administrator is to make the claim process hassle-free and easy by handling the documents and settling the hospital bills.
  • The Third Party Administrator can be in link to multiple health insurance policyholders.
  • Insurance companies depend on the third-party administrator for a smooth settlement process.

Understand the Role of TPA in Health Insurance

A TPA plays a significant role in processing health insurance claims. Some major roles of a TPA are explained below:

1. Issues health cards to the policyholders: TPA issues ID cards to the policyholders that they need to show at the network hospital in order to avail cashless treatment.

2. Coordinates with the policyholders: In case of a health insurance claim, the insured individual is required to inform the TPA. The TPA will direct the insured to a network hospital. The insured can avail of treatment at any other hospital as well but in that case, he/she will be required to pay for the bills out of their own pocket and then apply for reimbursement later.

3. Issue authorization letter to the hospital: TPA issues an authorization letter to the hospital and the hospital then tracks the case. After the insured gets discharged, the hospital management then sends all the bills to the TPA for payment.

4. Send all the relevant documents to the insurer: A TPA sends all the relevant documents including bills, to the insurer.

5. Arrange value-added services: Apart from the claim processing, a TPA also delivers several other services. These include well-being programs, ambulance services, etc.

6. Strengthens the hospital networks: An important aspect to look into to avail health insurance policy benefits is to have a Third Party Administrator. A TPA builds a strong network of hospitals where the insured can avail of the required treatment. It tries to enlist the hospitals that offer the best quality treatment and other facilities to the insured.

As per industry observers, TPAs are believed to bring the following changes:

  • Good quality of services
  • Greater efficiency
  • Improved procedures and due diligence
  • Increase the knowledge base of healthcare services
  • New management system
  • Minimization of expenses
  • Better penetration of health insurance
  • Possibility of more affordable health insurance premiums
  • Work towards making protocols to streamline investigation and avoid any delay

How Does TPA Insurance Work?

TPAs or third-party administrators play a significant role in simplifying claim settlement for health insurance companies as well as health insurance policyholders. TPAs undertake major responsibilities on behalf of health insurance companies to assist the policyholders, be it in the case of cashless claims or reimbursement claims. Let us shed light on the working of TPAs in both cases.

  • In the case of Cashless Treatment

When a policyholder decides to choose the cashless treatment, they get in touch with the TPA of their health insurance company. The TPA offers support in choosing the right network hospital for treatment purposes. When the policyholder goes to the hospital for treatment, the TPA guides them, on the hospital desk, regarding the submission of the required important documents for treatment. After gaining approval for the treatment, the TPA settles the treatment expenses with the hospital.

  • In Case of Reimbursement Treatment

The policyholder decides to go to the non-network hospital for some reason. They inform the TPA about their choice, undergo the treatment, and pay the hospital bills. Once discharged, the policyholder files for reimbursement of the hospital expenses settled by them. Here, the TPA guides the policyholder with the list of important documents required to be submitted for a successful reimbursement. After claim approval, the health insurance company transfers the claim amount to the registered bank account of the policyholder.

How Does TPA Help Health Insurance Policyholders?

A TPA simplifies the claim procedure under health insurance plans for the policyholders. The claim procedure can either be cashless or reimbursement. In case of a medical emergency, the insured goes to the hospital. He/she is then required to be hospitalized for at least 24 hours (not in daycare procedures like cataracts or other listed diseases) in order to make the claim admissible. In this case, the policyholder will inform the TPA or the insurance company about the admission and the treatment needed.

The TPA will then connect with the hospital to get approval for cashless treatment, if possible. If it is not possible, then the claim will be processed for reimbursement. After the treatment, if the request for cashless treatment is approved, then the hospital will send all the relevant medical bills to the TPA. If the request is not approved, then the policyholder will be required to submit the documents later.

The TPA will thoroughly verify the bills and other documents after which the claim settlement process will be initiated. In the case of cashless claims, the bills will directly be settled at the hospital, whereas in the case of reimbursement claims, they will be paid to the hospital via an insurance company.

Is TPA Insurance Essential?

If you have been thinking about whether having a TPA is a must, the answer is no! In case you don’t feel satisfied with your TPA, you can instantly let your insurer know and cancel the services offered by the third-party administrator. Alternatively, you can also ask your insurer to switch to another TPA. However, it is important to note that this decision solely depends on the insurer, if they find that the reasons for switching to a new TPA are convincing, they will get it switched.

Benefits Health Insurance Companies Get From Third-Party Administrators (TPA Insurance)

One of the key benefits third-party administrators or TPAs offer to health insurance companies is smooth health insurance claim settlement. Other key advantages of TPAs for health insurance companies include:

  • A dedicated source for claim settlement facilitation.
  • Coordination throughout the process, right from treatment to discharge.
  • Proper management & investigation of claim requests.
  • Superior quality of services.

Benefits Health Insurance Policyholders Get From Third-Party Administrators in Insurance

The benefit of TPAs for the insurance companies is quite obvious as the TPAs aid the insurers in settling the health insurance claims. When it comes to health insurance policyholders, Third Party Administrators benefit in many ways including:

  • Constant support at the time of hospitalization.
  • Giving ID cards to policyholders or patients.
  • Offering guidance with regard to the right kind of documentation.
  • Ensure that the cashless claims settlement process is efficient.
  • Providing 24×7 customer support.
  • Breaking the complexity of the entire health insurance claim settlement process.

Some Third-Party Administrators in Insurance in India

Listed below are some Third Party Administrators in India:

  • Medi Assist India TPA Pvt. Ltd
  • MD India Healthcare (TPA) Services (Pvt.) Ltd
  • Heritage Health TPA Pvt. Ltd.
  • E Meditek (TPA) Services Ltd
  • Family Health Plan (TPA) Ltd.
  • Raksha TPA Pvt. Ltd.
  • United Healthcare Parekh TPA Pvt. Ltd.
  • Focus Healthservices TPA Pvt. Ltd.
  • Dedicated Healthcare Services TPA (India) Private Limited.
  • Vipul Med Corp TPA. Pvt. Ltd.
  • Rothshield Healthcare (TPA) Services Limited
  • Focus Healthservices TPA Pvt. Ltd.
  • Safeway TPA Services Pvt. Ltd.
  • Vidal Health TPA Private Limited.
  • Ericson TPA Healthcare Pvt. Ltd.
  • Sri Gokulam Health Services TPA (P) Ltd.
  • Spurthi Meditech TPA Solutions Pvt. Ltd. No.

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FAQ About TPA in Health Insurance

  • What does a TPA do?

    The key role of a TPA or third party administrator is to facilitate the health insurance claim settlement process.

  • Can I select my TPA?

    TPAs are selected by health insurance companies.

  • Can a TPA help me in buying a health insurance policy?

    No! The role of TPAs starts after a health insurance policy is issued by a health insurance company.

  • Do all health insurance companies have a TPA?

    No! The presence of TPA varies with the health insurance company. The companies that do not have a TPA rely on their in-house claim settlement processing team.

  • Will I be eligible for TPA services if I have taken health insurance from one city and at present I am in some other city?

    Yes! The services of TPA can be availed anywhere in India. 

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