Information on Third Party Administrator (TPA)

Medical emergencies may knock the door anytime. Considering the rising healthcare inflation, one needs to be financially well equipped to protect himself/herself from health contingencies. Hence, health insurance has become an important requirement today. When it comes to health insurance, the process of claim settlement plays an important role in deciding how effective the health plan is. In order to make the benefit of insurance available for insured at the right time, almost every health insurance provider today is offering cashless healthcare facility, wherein hospital bills are directly settled by the insurance provider to the network hospital where insured is availing treatment. This is where the concept of ‘Third Party Administrator (TPA) has originated. In this article, let’s learn more about third-party administrators or TPA.

What is TPA (Third Party Administrator)?

In health insurance, TPA or Third Party Administrator is an insurance intermediary company licensed by the Insurance Regulatory and Development Authority of India (IRDAI). TPA plays the role of service integrator between Health Insurance Company, insured and the health service provider. Introduced by IRDAI in the year 2001, Third Party Administrators (TPA) are often independent agencies that assist Health Insurance Company in the claim settlement process. While some of the TPAs may operate as units of health insurance companies. Health insurance TPA’s being the special agencies set up by IRDAI (Insurance Regulatory and Development Authority of India) makes healthcare accessible for insured at the right time by handling the process of claim smoothly.

Why you need a TPA?

Various functions of TPA and acting as a mediator to the insurance company and insured smoothens the entire process of health insurance claim settlement. Having a special agency (TPA) licensed by the Insurance Regulatory and Development Authority of India (IRDAI) helps health insurance industry and the policyholders in various ways. Following are the reasons for which TPA’s need arise.

1. TPA (Third Party Administrators) deliver the services most efficiently and effectively
2. Vast knowledge of health care services
3. Adhering to the turnaround time for settlement of cashless or reimbursement claims
4. Due diligence and standardized procedures
5. Improved health insurance penetration
6. Minimises expenditure as TPA charges no cost for the services
7. Proper management and investigation of the case

How does TPA work?

Once the health insurance company gives the administration work to TPA, it starts working in the following ways:

1. All the details of health insurance policies issued will be shared with TPA
2. Health insurance TPA will issue identity cards or health cards to all policyholders of the insurance company which has to be used during claims at the hospital. Insured needs to show the card to the hospital authorities to seek cashless healthcare facilities
3. Card will have all the details of TPA and policy. The policyholder needs to place the claim intimation by calling upon TPA’s toll-free number.
4. After informing the health insurance TPA and placing cashless claim request, the policyholder can seek healthcare services at the network hospital
5. TPA will review the cashless claim request and issue an authorisation letter to the hospital for treatment. Depending on the policy’s terms and conditions, claim settlement will be done.

Role of Third Party Administrator in health insurance

Health insurance companies outsource many of their administrative work to third party administrators or TPAs. There are various services and day-to-day operations of health insurance companies are handled by TPAs. TPA not just plays a crucial role in approving health insurance claims, but also performs many other functions. Let’s take a look at the functions of third party administrators or TPAs in health insurance.

1. Processing and settlement of claims which includes
   • Accepting claim intimations
   • Authorising cashless claim request
   • Final settlement of claims
2. Issuance of health card
3. Providing a network hospital list
4. Premium collection
5. Tracking claim status
6. 24/7 helpline service
7. Policy database maintenance
8. Value-added services such as
   • Ambulance services
   • Wellness programme
   • Health facilities during emergencies
   • Medicine supplies

List of TPAs (Third Party Administrators) in India:

Frequently Asked Questions

1. What are the benefits of health insurance TPA to a policyholder?

   Health insurance TPA helps a policyholder to experience smooth claim settlement process by extending help in every step such as providing the health card, giving details of network hospitals or through 24/7 helpline facility. The policyholder can benefit from value-added services offered by TPA such as ambulance services, wellbeing programmes and special consultation etc.

2. What do you mean by network hospitalisation?

   There are many hospitals empanelled with health insurance TPAs to provide cashless facility to the policyholders. Those hospitals are referred to as network hospitals. If the policyholder is choosing his/her preferred hospital for treatment from the list of network hospitals, he/she can avail cashless hospitalization facility.

3. What is the cashless facility?

   Cashless facility refers to claiming the benefits of health insurance for availing services at the TPA’s empanelled network hospital. That means TPA will process the claim and the settlement of claim will be directly made to the hospital without the insured having to spend out of his pocket for hospitalisation.

4. What are the benefits of health card issued by health insurance TPA?

   Health card is issued as an identity card which carries the information of policy, plan type, TPA address, contact details etc. Carrying a health card helps you and your family to seek cashless hospitalisation facility anytime anywhere. You just need to produce health card to the hospital authorities at any TPA’s empanelled network hospitals and place requisition for cashless facility. TPA help desk counter at the network hospital will review and verify your requisition and then provide approval for cashless facility

5. What are the details to be provided at the time of placing claim intimation with health insurance TPA?
   

   Following are the details to be provided at the time of placing claim intimation with health insurance TPA:

   1. Health insurance policy number
   2. Policyholder name
   3. Nature of injury/illness
   4. Name and address of the hospital
   5. Date of admission to the hospital
   6. Any other information asked by TPA
6. How is TPA different from health insurance companies?

   TPA is an intermediary who facilitates the health insurance claim settlement. However, the decision of rejecting or accepting the claim will be taken by the provider of health insurance solutions that is the health insurance company.

7. Can TPA issue policies?

   No. Policy will be issued by the health insurance provider that is the health insurance company. TPA is appointed by the health insurance company for facilitating the administrative work.

8. What is the difference between health card offered by TPA and health insurance companies?

   Health card offered by both TPA and health insurance companies are the identity cards that can be produced at the network hospitals for availing cashless treatment facility. The card will carry necessary information regarding the policy, the insurance company and the TPA.