The hospitalization of our dear ones is worrisome. However, a sigh of relief is that we have an active health insurance policy.
Now, what if an emergency hospitalization situation arises and we have to handle the nuts and bolts of the health insurance claim process and all the other paperwork that comes with it. That can be the frightful moment of our lives. Now, this is where a third party administrator aka a TPA comes to the rescue. We can take care of our loved ones while the TPA in health insurance takes care of the claim process.
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 TPA.
Read: Group health insurance 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 health insurance companies in India, 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 health insurance 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 identity 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.
Pre-authorisation for Hospitalization
For planned admissions, TPAs handle pre-authorisation requests, ensuring faster approvals and hassle-free hospitalisation for policyholders.
Read: Network and non-network hospitals - What are they and how do they impact you?
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.
- A TPA can also provide value-added services like ambulance services, wellness programs, 24X7 helpline, etc.
- Also, a TPA helps you by getting you the best network hospital listed on your insurer's list. With this, you become eligible for a cashless claim settlement.
- TPAs issue e-health cards that simplify the admission process during emergencies and ensure quick access to policy details.
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.
TPA Claim Process – Timeline
Who Appoints the TPA?
In health insurance, the insurance company typically appoints the TPA.
Some insurers do not outsource this process at all; instead, they operate through in-house TPAs or claim departments. These in-house teams often ensure faster turnaround, centralised claim tracking, and streamlined service.
Regardless of whether the TPA is external or internal, all TPAs operating in India must be licensed by the IRDAI and adhere to defined service-level agreements to protect policyholders.
Read: TPA vs in-house claim settlement process
List of best TPA in India 2025
Here is a curated list of top IRDAI-licensed TPAs in India that streamline health insurance claims and provide value-added services:
Family Health Plan Insurance TPA
Heritage Health Insurance TPA
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