Role of Health Insurance TPA (Third Party Administrator): Meaning, Understand in Detail

A medical emergency can occur at any time in the family. When someone in the family is diagnosed with any disease and needs immediate medical help, you may invariably rush to a hospital to provide the best medical care. If you have a health insurance policy, you can breathe a sigh of relief knowing that the insurer will take care of the expenses.When it comes to filing a claim for the medical expenses you may incur while being admitted to the hospital, you have to deal with the Third Party Administrator (TPA) .

A TPA is an organisation that processes the insurance claims in a timely and hassle-free manner filed by both corporate and retail policyholders. The TPA works as an intermediary between you and the insurance company, and they are generally hired by the insurers to process the health insurance policy claims. These bodies are licensed by the insurance regulatory body, Insurance Regulatory and Development Authority of India (IRDAI).Over the years, the health insurance sector has evolved tremendously, and the insurance companies today offer various plans. Also, the number of insurance plans sold in a year has increased considerably. In such a situation, many insurance companies find it challenging to track various health insurance-related operations, especially handling insurance claims. It requires a specialised workforce and expertise. Therefore, the IRDA allowed the insurers in India to hire TPAs.The health insurance TPA was introduced in 2001, and since then they are held responsible for:

• Assuring high-quality services to the policyholders filing their claim
• Handle a high amount of insurance claims on behalf of the insurance companies

The role of TPA starts immediately after the policy is issued. Some of the important function that the TPA carries out include:

• Issuance of Health Card For every policy the insurer sells, they issue a health card to the policyholders. The card validates the policy and holds vital information about the policy, including policy number and the TPA responsible for the claim process. Often, the insurance companies outsource the health card issuance process to the Third Party Administrator.If you need hospitalisation, you must inform the insurer or the TPA about it and show this card at the time of admission. It is one of the important documents required to complete the claim process.
• Health Insurance Claim Settlement Process One of the health insurance TPA's primary responsibilities is to act as an intermediate between the insurer and the policyholder to expedite the claim settlement process. The TPA's role is to check and verify all the policyholder's documents in favour of the claim. The TPA can ask you to provide additional information (as needed) to validate your claim request. Depending on the policy terms, the settlement is done either on a cashless basis, or the insurer reimburses the amount.Irrespective of the claim mode, the TPA will check the claim details and verify the same. For cashless claims, the TPA collects the documents from the hospital, and in case of reimbursement, they will ask you to provide the supporting papers and copies of bills and receipts.In some cases, if the TPA suspects a wrong claim , it might take a second opinion and investigate the hospital records before approving the request.
• Maintaining A Database TPA helps the insurer to maintain a database. After the policy papers are issued to the policyholder, all the relevant documents, including the proof identity and residence proof, are transferred to the TPA for record maintenance. All policy-related communication is with the TPA and not the insurance company.
• Providing Customer Support Another critical role of health insurance TPA is providing 24x7 customer service to the policyholders. It is responsible for attending to the customers' queries and providing information about the eligibility for different plans, claim settlement process , network hospitals, claim settlement status, etc.
• Better standardisation Since the TPAs have specialised skill sets, they help the insurance companies standardise the procedures and set a meticulous process for both insurers and the insured. The TPAs help the policyholders avoid confusion regarding the various processes of the insurer. This also allows the insurers to improve the quality of services provided to their customers and avoid fake claims.
• Provide value-added services Apart from issuing health cards, maintaining documents, and guiding the policyholders through the claim settlement process, the TPA also provides value-added services like arranging ambulances for the patients, directing patients to wellness programs, providing medical supplies, etc.

The involvement of health insurance TPA allows the customers to breeze through the claim settlement process and get immediate assistance for policy-related queries.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.