We purchase health insurance plans from the health insurance companies. In the same way, TPA or third party administrators also provide administrative services like health insurance claims processing, settling claims, collecting premiums etc.Let us understand more about these third party administrators or TPAAlso read: Why health insurance - a complete guide
What is a TPA?
A third party administrator or TPA are bodies licensed by Insurance Regulatory and Development Authority of India (IRDAI). These administrators are independent, but can also work as an entity belonging to the insurance company. The main purpose of a third party administrator or a health insurance TPA are claim processing and settling claims raised by the policyholders. So, these TPAs act as a middleman between the policyholders and the insurance company.
Why did IRDAI come up with health insurance TPA?
In the last few years, the number of insurance providers, the policies sold, types of health insurance products and the buyers saw a rapid increase. As a result, it became very tough to offer quality services and even keep a track of these records. So, IRDAI appointed these third party administrators to process claims and offer quality services to the policyholders.
What is the role of TPA in health insurance?
The role of TPA in health insurance are very versatile and they are
Processing and settling claims
The major function of a health insurance TPA or third party administrator is to process and settle the claims raised by the policyholders.Third party administrators check all the documents regarding the claim and even cross verifies it. These claims can be a reimbursement claim or a cashless claim process. The TPA is liable to initiate the claim as soon as it is raised by the policyholder
Issuing health insurance cards
While purchasing a health insurance plan from the insurance company, it is necessary to issue a card to the policyholder. This card holds information like policy number and details about the TPA who will process the claim.During the time of hospitalization, the policyholder can show his/her health insurance card and raise the claim to the insurance company or the TPA. After raising it, the TPA takes care of the rest of the processes. Hence, this health card is one of the necessary documents for processing claims.
Providing services and build strong network hospitals
Another important function of the TPA is to provide services like arranging for ambulance services, quickly arrange for cashless services at the network hospitals. Apart from this TPA can build an effective network of hospitals where the policyholder can avail treatments and cashless facilities.
Advantages of TPA in health insurance
Major advantages of the third party administrators in health insurance are
- During the time of hospitalization, the TPA takes care of the hospital bills and other payments. While you can take care of your family member in need. As a result the whole process becomes tension free.
- A health insurance TPA initiates the claim as soon as you raise one. The whole process of initiating a cashless service at the hospital becomes faster.
- As the main function of a TPA is to process and settle claims, the processes will be carried out steadily with great stability.
Difference between a TPA and in-house claim settlement department
After purchasing a health insurance plan from the insurance company, processing of claims happens in two ways.
- In the first case, the insurance company hires a TPA aka Third Party Administrator to take care of all things related to the health insurance claim process like a cashless facility at the hospital or a reimbursement process.
- In the second case, the in-house health insurance claim settlement department settles the claim. It is set up by the insurance company within itself. They settle the claim without the help of any external TPAs. In this case the policyholder can directly deal with the insurer rather than approaching an intermediary. They are also known as the Health Administration Team(HAT).
Apart from this there are some key differences between them. Like,
- For settling the claims the TPAs are dependent on the insurers, whereas the insurance company handles the claims itself in the case of in-house claim settlement process.
- The TPAs are not responsible for accepting or rejecting claims, they can only process them.
- Claim settlement through the in-house claim settlement department can be efficient as well as time consuming. This is because the policy holders have to go through customer care like service.
List of Third Party Administrators for Health Insurance
Here is a list of a few third party administrators for health insurance in India.
- United Health Care Parekh Insurance TPA Private Limited
- Medi Assist Insurance TPA Private Limited
- MDIndia Health Insurance TPA Private Limited
- Paramount Health Services & Insurance TPA Private Limited
- Heritage Health Insurance TPA Private Limited
- Family Health Plan Insurance TPA Limited
- Raksha Health Insurance TPA Private Limited
- Vidal Health Insurance TPA Private Limited
- East West Assist Insurance TPA Private Limited
- Medsave Health Insurance TPA Limited