Understand the Major Role of TPA in Health Insurance

Medical emergencies are unavoidable and want instant action. Have you or your loved ones been to a hospital? It must have been a financial and emotional roller-coaster. But with health insurance, the pressure on your pocket may get a little lighter. 

When you and your family are in a medical emergency and taking care of your loved ones, you need someone who can support you with the claim process. Here comes the role of the hospital TPA desk. 

But what is a TPA, where do you find it, and how does it help? This article provides all the necessary details about TPAs in health insurance and their functions and responsibilities regarding health insurance claims. 

What is TPA?

Third Party Administrator is the full form of TPA. It is a body in a hospital that is not directly involved with health insurance but helps process insurance claims. As soon as an individual is admitted to the hospital, an intimation is given to the TPA. TPA is licensed by the Indian Regulatory and Development Authority of India (IRDAI). 

Every health insurance company appoints a TPA at your service to make the claim process easier for you. So you do not have to pay the administrator directly. After analyzing the terms and conditions, the TPA can approve a cashless or reimbursement claim settlement. 

What is TPA in Health Insurance?

TPA in health insurance plays a key role in managing insurance policies and claims on behalf of the policyholders. The primary role of the third party administrator is to assist the policyholder during the claim settlement process between a policyholder and the insurer. The following points will help you understand the TPA in health insurance in a better manner: 

• The health insurance company itself selects TPA. 
• A third party administrator works as the link between the insurer and the insured when health insurance claims are made.
• TPA helps individuals to avail of insurance benefits effortlessly. 
• TPA ease up the tasks related to the claim settlement process, such as dealing with the documentation process and settling the hospital bills. 
• One TPA can be associated with several insurance providers. 

What is the Role of TPA in Health Insurance?

TPA in health insurance works as an intermediary to get a number of tasks done, from claim processing and settlement to providing efficient support and network hospital coordination. 

Let’s understand the role of TPA in health insurance in a better way: 

Connecting Link

In the case of a health claim, the insured directly or indirectly deals with the TPA. For every claim raised, TPA issues the patient with an authorized health card with a Unique Identification Number (UID). Thus, TPA links the insurance company and the policyholder to insurance coverage and easy claim processing. 

Smooth Claim Settlement 

As soon as the insured intimates the claim, the TPA checks all the documents submitted and asks for any additional information if required. Furthermore, the TPA is liable to check all the documents, whether it's a cashless claim or a reimbursement claim. 

Issue Pre-Authorization Letter to the Hospital

Once the application for cashless treatment is submitted to the TPA, they evaluate the case for coverage of treatment within the scope of the health insurance policy. Upon approval, TPA issues the pre-authorization letter to the hospital. 

Value-Added Services 

TPAs take a step ahead and help the insured avail of other services, such as ambulances and well-being programs, as required. They ensure the insured can focus on medical treatments without indulging in documentation or other processes. They also ensure the health insurance company can focus on underwriting and risk management. 

Fraud Detection 

During claim verification, third party administrator detects the claim for any fraud, keeping the insurance process as transparent as possible. They collect all the necessary information about the policyholders and their claims. 

Continuous Support

TPAs offer a 24/7 support system where policyholders can connect to raise their queries and gain assistance regarding health insurance claims. They can also connect with the TPA helpdesk to check the status of their claims. 

Hospital Empanelment

TPA assesses whether a hospital meets all the eligibility criteria for being part of a network hospitals. They ensure the services listed are provided to the insured during a medical emergency. The third party administrator tries to strengthen the network of hospitals to increase its capabilities to carry out cashless treatments and allow possible negotiations. 

How does TPA in Health Insurance work?

TPA takes the major responsibility on behalf of the health insurance company to assist the insured during claim processing— whether cashless claims or reimbursement. Here’s the working process of TPA in health insurance: 

In case of Cashless Treatment: 

• The insured needs to be hospitalized at one of the listed network hospitals. 
• The hospital then forwards the treatment costs and details to the TPA. 
• TPA starts the documentation process to evaluate the policyholder’s eligibility, policy coverage, and benefits offered and informs the insured about what will be covered and what not. 
• In a qualified scenario, the third party administrator issues a pre-authorization to the concerned network hospital to allow the policyholder to avail of the cashless treatment benefits. 
• Once the treatment is completed, the TPA settles the hospital dues directly on behalf of the health insurer. 

In case of Reimbursement Claim:

• When an insured is hospitalized at a non-network hospital, they will have to pay from their pockets for the treatment received.
• Record all the medical bills, receipts, prescriptions, and other relevant documents to support the claim raised. 
• Once the third party administrator verifies the submitted documents, they forward the claim to the insurance company.  
• When the health insurer approves the claim, the TPA reimburses the entire amount directly to the insured's bank account. 

How to Cancel TPAs in Health Insurance?

There might be a chance that the insured is not satisfied with the services provided by the TPA. In such cases, they can contact the health insurance provider, who will coordinate with the third party administrator regarding the issue. 

However, if you still want to cancel or change the TPA in health insurance, follow the given process: 

Step 1: Reach out to the health insurance company.

Step 2: Share your policy details and Unique Identification Number. 

Step 3: Explain the reason for the cancellation of TPA. 

Step 4: When the insurer approves the change, you can select another TPA from the list. 

* Note that you can file for intimation about the cancellation or change of TPA in health insurance at the time of policy renewal or change of health insurance provider. 

What are the Risks Associated with TPAs?

TPAs are appointed to make the claim settlement process easy in individual or group health insurance plans. In most odd cases, health insurance companies have witnessed certain risks regarding the TPA agents becoming fraudulent sources and causing financial loss for both policyholders and insurance companies. 

However, health insurance companies conduct regular audits and risk management controls on their TPAs to avoid such risks. They require the third pary administrators to maintain accurate claims records and deliver efficient customer support. 

List of Third-Party Administrators for Health Insurance

Below is the list of third party administrators (TPAs) in health insurance as available on the official website of Insurance Regulatory and Development Authority (IRDAI). 

* The list of TPAs in health insurance is taken from the IRDAI official website and was last updated on 29 February 2024.

Bottom Line

The intermediary role of TPAs ensures that policyholders receive hassle-free medical care and coverage, health insurance companies pay for the services, and healthcare providers get their reimbursements timely. So, third party administrators are not only the medium of claim processing but also make health insurance more accessible and user-friendly for policyholders. 

* Disclaimer: The details, facts, or figures given here are intended solely for the reader's informational purposes and should not be relied upon for personal, medical, legal, or financial decisions. Please visit the insurer's website for the latest updates. We do not endorse any particular insurance company or insurance product provided by any insurer.

FAQs: 

Question: What does TPA do in insurance?

Answer: TPA health insurance meaning third party administrator who works as a bridge between a health insurance company and the policyholder. They help insurers provide health insurance policies to the policyholders and process claims on behalf of the policyholders. 

Question: What is the role of TPA in cashless hospitalization?

Answer: TPA facilitates cashless hospitalization by coordinating with the network hospitals and ensuring the hospital gets reimbursement from the health insurer for the services provided. 

Question: Does TPA in health insurance charge money?

Answer: No, TPA does not charge any fee to policyholders. 

Question: What is the difference between TPA and health insurer?

Answer: A health insurer offers insurance policies (individual, family, and group) to policyholders and receives a fixed premium in return. 

While, a TPA works as an intermediary between the health insurer and policyholders to streamline a smooth and hassle-free claim settlement process. Moreover, a TPA offers services like issuing ID cards, documentation, and easing value-added services. 

Question: Which is the best health insurance TPA in India?

Answer: There are a number of TPAs working in the insurance industry. The definition of the best health insurance TPA in India may vary from person to person depending on their requirements. We suggest you check all information regarding TPA on the IRDA website. 

Question: Who hires the TPA in health insurance? 

Answer: Generally, TPAs are appointed by the health insurers to streamline claim processing. 

Question: How does TPA help the policyholders?

Answer: The TPA plays a major role in easing the claim processes for policyholders in the following manner: 

• Assisting at the time of hospitalization
• Issuing ID cards to policyholders to gain access to medical benefits
• Asking for the documentation requirements and managing all the records 
• Work as a link between the health insurer and the policyholder
• Easing the entire claim settlement process
• Ensuring that the policyholder receives the necessary support at the network hospital at the time of emergency
• Arranging needed value-added services to the insured, such as road ambulance, wellness programs, doctor schedules, etc.
• Providing 24X7 customer support

Question: Can I select my TPA?

Answer: No, the insured cannot select the TPA, but they are appointed by the health insurance companies and licensed by IRDAI. 

Question: What are the benefits of Third Party Administrator (TPA) in health insurance?

Answer: The major benefits of TPA in health insurance are efficiently running the ecosystem of health insurance more transparent by: 

• Easing the claim settlement process, 
• Identifying the frauds, 
• Ensuring the insured gets all the necessary assistance and claim support, 
• Increasing convenience of cashless or reimbursement claims,
• Helping in cost contaminants.

Question: How does third party administrator (TPA) help the insurance companies?

Answer: Besides easing the claim process, the health insurer relies on the TPAs for the following reasons: 

• Working as a dedicated desk for facilitating claims processing
• Coordination throughout the process from treatment to discharge
• Managing the claim requests and analyzing for the proper documentation
• Ensure better quality of services

Question: What documents are required to make a health insurance TPA claim?

Answer: To make a health insurance TPA claim, the following documents are required: 

• Aadhaar card
• TPA e-card copy or insurance certificate copy
• Hospital discharge summary
• Doctor prescription
• Hospital bills
• Pharmacy summary