What is TPA in Health Insurance?

Medical emergencies are unexpected and uncertain. They strike at the most inopportune times, leaving you stranded. The costs of availing of medical facilities are skyrocketing. The soaring medical inflation makes it even more necessary to have health insurance coverage. Those who have robust health insurance coverage are protected from financial hassles whereas those who don't could find themselves in a debt trap. Here the importance of health insurance policies is established. But apart from the health insurance company, there is an intermediary organisation known as the third-party administrator, that you might need to interact with. Fret not! Here we explain all you need to know about the meaning of TPA, including the vital role a TPA plays.

What is TPA?

A third-party administrator or TPA is an organisation that administers the claim-handling process for an insurance company. Not only that, but any grievance or redressal process for the claimant is also taken care of by the TPA. Health insurance TPA is an independent organisation different from the insurance company. These bodies are also licensed by the Insurance Regulatory and Development Authority of India (IRDAI) to operate on behalf of the insurance companies. One can understand the meaning of TPA in health insurance by looking at it as an extended arm of the insurance company. With more and more people availing of a health insurance policy, the number of claims has also increased. It gets difficult for insurers to manage all these claims single-handedly. That’s where health insurance TPA come into the picture. By providing consistent and quality services, they help insurers in processing a large number of claims on a daily basis.

What is Third Party Administrator (TPA) in Health Insurance?

A TPA ensures all your claim-related queries are taken care of and addressed. Moreover, the validity of a claim application is also checked by a health insurance TPA. Every insurance company appoints a TPA for servicing its policyholders. Under the Insurance Regulatory and Development Authority of India (Third Party Administrators - Health Services) (Amendment) Regulations, 2019, every insurance company has to provide an option of selecting the TPA to the policyholders from the list of empanelled TPAs. Moreover, the policyholders can also change their TPA at the time of renewal of their insurance policies.

Who all are part of the team of TPA or third-party administrator?

The TPA generally consists of a team of in-house medical professionals registered with the Indian Medical Council, insurance consultants, people having expertise in the legal field, management consultants, along with IT professionals.

What role does a Third Party Administrator (TPA) play in Health Insurance?

Apart from functioning as an intermediary between the insurance company and the policyholder, a health insurance TPA plays a crucial role as follows –

1. Maintain records of the policyholder

Once the insurance company issues the policy, these records are transferred to the TPA organisation. The TPA maintains the records and assumes most of the responsibilities for the insurance company. Identity cards with a unique number are issued to policyholders, including the beneficiaries under the policy.

2. Settlement of Claims

One of the crucial roles that a TPA plays is the settlement of your claim applications. In case of a cashless claim settlement, the TPA directly coordinates with the hospital for settling the medical bill. Moreover, in reimbursement cases, the TPA checks the validity of your claim application for admissible expenses under the policy terms. If there are any doubts regarding the claim filed, the TPA can investigate hospital records too.

3. Cashless claim facility

A third-party administrator assists the policyholder when it comes to claims related to cashless health insurance plans. Once you furnish the required forms to the hospital, it submits the details to your health insurance TPA. All further matters related to medical facilities availed at the hospital are taken care of by the TPA. You must note to avail of a cashless facility, you need to avail treatment from a specified network hospital pre-defined in your insurance policy. Although it is a handy feature, it is your choice, i.e., the insured's choice, as to where to opt for the treatment.

4. Empanelling network hospitals

TPAs are further responsible for monitoring as well as adding new medical facilities to the list of network hospitals for the insurance company. As stated earlier, a policyholder can avail of a cashless medical facility at a network hospital. The facilities provided and the quality of services offered along with its proven track record are some of the factors accounted for when adding a hospital as part of the network chain. The general insurance policy document specifies the list of such network hospitals at the time of purchase or renewal.

5. Serves as a helpdesk

Along with the functions mentioned above, a TPA is responsible for maintaining a 24x7 helpdesk facility. It is done to address any emergency claims of the insured as well as any queries regarding claims. The services of such helpdesk facilities are over and above those maintained by your insurance company.

6. Add-on facilities

Lastly, a few TPAs also provide add-on services like ambulance facilities, lifestyle management programmes, healthcare facilities, supplies related to medicines, and more.

Why is Third Party Administrator (TPA) required?

A Third Party Administrator (TPA) is essential in health insurance to streamline claim processes and enhance customer experience. TPAs act as intermediaries between policyholders and insurers, handling tasks such as claim verification, documentation, and settlement. They ensure that claims are processed efficiently and within the stipulated timelines, reducing hassles for the insured. TPAs also offer 24/7 customer support, assist with cashless treatments at network hospitals, and help policyholders navigate their health insurance benefits. By outsourcing administrative duties to TPAs, insurers can focus on delivering better coverage and services. This collaboration ensures transparency, faster resolutions, and a seamless experience for policyholders.

Benefits of Third-Party Administrators in Health Insurance

As a policyholder, aside from knowing the meaning of TPA, you should also know how you can benefit from the services of a third-party administrator in the following ways:

1. Issuing health cards

Your details as a policyholder are stored with the third-party administrator, who issues health cards to you based on that information. You may also receive the contact details of the TPA at the time of receiving the card. You can use these contact details to ask questions related to network hospitals, claim status, and so on. *

2. Support during hospitalisation

When you are facing a medical emergency, there is a chance that dealing with health insurance procedures may take a back seat. This is where a third-party administrator can be of help. They can assist you in various ways during the hospitalisation process so that you can focus and spend time with your loved ones. *

3. Assistance during the claims process

Raising a claim on your health insurance policy can be beneficial during medical emergencies; however, the stressful situation may not allow you the time and space to raise a claim. Here, you can take the assistance of a third-party administrator. From helping you with the documentation to solving your minutest queries, a TPA can be your helping hand during times of crisis. *

4. Ensuring policyholders receive high-quality care

TPAs are also responsible for empanelling network hospitals for the insurance company. The various professionals present in the TPA body use their expertise to evaluate hospitals based on a number of metrics. This ensures that when the policyholder opts for treatment at one of the network hospitals, they receive the best treatment and care. * To conclude, as crucial as it is to select an insurance company, it is just as important to choose the right TPA. With a choice available to select the TPA of your choice, ensure you have a proper third-party administrator after careful evaluation of the alternatives at hand.

How to cancel third-party administrators in health insurance?

Though TPAs can be quite helpful, there may be instances where they may not provide you with the services you require at the right time. In such a scenario, you can consider cancelling your TPA and switching to a different one. * Here is a step-by-step guide on how to go about cancelling your TPA:

1. Contact your insurance company and let them know of the situation.
2. Share the relevant details with the insurer, such as your policy details and your ID number.
3. Express to them why you wish to cancel your TPA.
4. If your request for TPA cancellation is approved by the insurer, then you can select another TPA as you see fit from the list.

A list of TPAs affiliated with your insurer can be availed by raising a request for the same. Also Read - How to Check Health Insurance Policy Status?

Conclusion

To conclude, third-party administrators (TPAs) simplify health insurance processes by managing claims, assisting during hospitalizations, and ensuring quality care at network hospitals. Choosing the right TPA is crucial for a hassle-free experience and reliable support during medical emergencies, enhancing the value of your health insurance coverage.

FAQs

1. What are some limitations of a TPA?

One must remember that third-party administrators are intermediaries between the insurance company and the policyholder. Thus, they are not the final party in question, and hence, they may not have adequate information on hand. Though they may help in settling and investigating claims, they do not have the final say in whether the claim may be approved or not, either. *

2. Are TPAs the same as agents?

No, TPAs and agents are different. Insurance agents understand your coverage needs and help you select the ideal policy accordingly. TPAs are intermediary bodies that deal with a host of policyholder-related responsibilities. *

3. Do TPAs charge additional money for their services?

The services provided by TPAs are a part and parcel of your insurance plan. There is no need of paying additional remuneration to TPAs. * * Standard T&C Apply Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.