Guide to Group Health Insurance With Maternity Cover
Guide to Group Health Insurance With Maternity Cover


Group Health Insurance

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What Is TPA In Health Insurance?

A third-party administrator or TPAs are bodies licensed by the Insurance Regulatory and Development Authority of India (IRDAI). These administrators are independent, but can also work as an entity belonging to the insurance company. TPA or third-party administrators also provide administrative services like health insurance claim processing, settling claims, collecting premiums, etc. Let us understand more about these third-party administrators or TPA. So, these TPAs act as a middleman between the policyholders and the insurance company.
In this case, the TPA provide services to the employees who have an active group health insurance policy from their organization.

TPA full form in insurance → Third-party administrator

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.

Also read: Difference between OPD and IPD

Difference between TPA and insurance company

Insurer TPA
A company that provides insurance A company that assists insurers with claim settlement
Provide policies and sanctions claims. Be a point of contact for policyholders and help policyholders and insurers to process claims
Choose to work with TPA or can have in-house teams Is appointed by the insurer
Has the authority to accept or reject a claim. TPA cannot accept or reject a claim. They help get documents and details from the policyholder for the insurer to make this decision.

What is the role of TPA in group health insurance?

The role of TPA in health insurance is 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 group mediclaim policy and other retail 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

When the organizations provide medical insurance for employees, the TPA provides them with a TPA card. TPA card is an interchangeable term used for a health insurance ID card issued to the employees. It is an identity card with a unique ID number/policy number.

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. Today, most insurers and TPAs offer e-cards to allow easy processing of cashless claims.

Providing services and building strong network of hospitals

TPA can build an effective network of hospitals where the policyholder can avail treatments and cashless facilities. They constantly get hospitals empaneled with them and update the list of the network hospitals for policyholders’ visibility.

Another important function of the TPA is to provide services like arranging ambulance services and cashless services at the network hospitals.

Read : Network and non-network hospitals

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.

TPA insurance companies list

Not all insurers work with TPA. Some insurer have in-house teams to handle the tasks of TPA. For instance, Aditya Birla group health insurance company has an internal TPA to handle the claims of the policyholders.

The in-house claim settlement process

An in-house claim settlement department or Health Administration Team (HAT) is an entity set up within the insurance company for only its customer-centric functions. The in-house claim settlement department has the same function as that of the outsourced TPAs. The job of the inbound claim settlement department is to provide a hassle-free claim settlement experience and solve any grievances of the policyholders of the insurance company without any delay.

In-house TPA vs External TPA

In-house TPA also known as Health Administration Team (HAT)

Parameters In-house TPA External TPA
Role A team in the insurer company that handles claims, ID generation, documentation of claims and network hospitals An external service provider that insurers uses to help them with claims, ID generation, documentation of claims and network hospitals
Type Can work for only insurer Can work with multiple insurers
Claims Claims get settled faster as the process is in-house with less turn around time and friction. Comparatively slow as TPAs can’t accept or reject claims directly and are constantly dependent on the insurers
Network hospitals In-house teams have lesser size of network hospitals for cashless TPAs have a larger network hospital list in India as they work with many insurers

Frequently asked questions

What is TPA in a hospital?

TPA in hospitals helps patients with their insurance policies. If patients want to use their insurance policy during their hospitalization, TPA can help them raise a claim. TPA is there in the hospital so you could inform prior about the hospitalization and your policy.

What are TPA services?

Third-Party Administrators (TPA) services include generating health ID cards, helping patients and insurers with documents for claims, updating claim status, and building network hospitals.

How many types of TPA are there?

There are 19 TPAs in India. You can check all the TPAs in India here

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