What Is A Third Party Administrator (TPA) & Its Role In The Health Insurance Industry?

The demand for health insurance plans has grown in recent years, primarily because of the pandemic and its ongoing devastating effects on humans. The process of getting a health plan is just the beginning but you must also be aware of the claim settlement process as well as how to successfully file a claim without any last-minute hassles. To facilitate this exercise smoothly, the procedure of settling claims in the insurance industry is handled by a Health Insurance TPA. TPA full form is a third-party administrator. Read on to know how TPA is effectively helping to impart the functions of insurance claims and what do we mean when we refer to health insurance TPA of India?

Prateek Sharma is working as a senior management professional with an MNC based out of Mumbai. He was recently diagnosed with COVID-19 and was recommended treatment at a hospital. Prateek`s family was not very inclined towards hospitalization but looking at his health over the next few days, they finally decided to admit him to the hospital. Since he had an active health insurance, it was easy for them to shortlist a hospital in the insurance TPA`s network list, where they could make use of cashless treatment. Moreover, the TPA was also helpful in suggesting to them the list of hospitals that provide COVID-19 treatment which made it convenient with their choices. Prateek finally got admitted to a hospital, opted for cashless treatment, and recovered to good health in the next 20 days.

What is TPA in insurance?

The full form of TPA is a third-party administrator. It is a licensed company approved by the IRDAI to conduct business, which is appointed by the health insurance company, primarily to serve their customers helping them in various insurance policy-related services, including claim processing.

TPA Insurance can be referred to as an intermediary between the health insurance company and the policyholder.

Role of TPA in health insurance

Now that you have understood TPA’s full form in insurance, let’s understand its role in insurance. In addition to processing claims for health insurance firms, it is natural for anyone to raise a question on what is TPA in health insurance. The TPA is also responsible for the implementation of various other tasks, that include:

1. Hospital Network: The health insurers depute the TPA`s to maintain a large hospital network for them to provide cashless services to policyholders. While inducting a hospital into the insurer’s network, the TPA will look at the facilities of the hospital’s infrastructure, management experience, doctors’ experience, etc., to provide a wide variety of choices to the policyholders.

2. Issuing Health Cards: While the insurance company registers a policyholder based on the plan they had opted for at the time of registration, the TPA shall complete all the other required documentation, collect premiums and issue the TPA health card at the time of issuing the policy. This card shall contain all the important policy-related information and act as a mandatory document to be presented to the hospital during hospitalization, for the claim processing.

3. Policyholder Records: Once the policies are issued to the respective policyholder, the insurance company transfers the records of the policyholder to the TPA who becomes accountable for the maintenance of those records. Maintaining the policyholder database, as well as claim settlement grievance resolution is one of the responsibilities of the TPA.

4. Other Services: TPAs are also responsible for offering other value-added benefits to the policyholder on the behalf of an insurance company such as annual health check-ups, concierge, telephone hotline, teleconsultation, ambulance services, health camps, etc.,

Benefits of TPAs over In-house Claim Department

With 26 health insurers in India, TPA`s are bringing the services of these health insurance companies to the masses. Since they are licensed by the Insurance Regulatory Development Authority of India (IRDAI) to act as third-party administrators (TPA), they transform into a health insurance company providing the following benefits to policyholders.

• TPA’s have tie-ups with a wide network of hospitals which makes it simple for a policyholder to select the hospital you want to visit in the most convenient location.
• A majority of TPAs are present across the nation, allowing policyholders to contact them from anywhere and any time to get their doubts answered. Certain TPAs even operate 24/7 to respond to urgent calls from policyholders. The internal claims department of insurance firms works only during business hours as they are run by the employees within their organization.
• The chances of having your cashless claim accepted are extremely high when you’re admitted to a hospital in the TPA network.
• TPAs know the procedures of claim settlement, premium collection, customer support, etc, making the complete process productive and efficient, creating value for policyholders.

How to ensure your claim gets approved by TPA?

When filing for claims there is a chance of it getting rejected due to different reasons. Here are some tips to ensure that your claim is approved by TPA, without any issues.

• Lookup for the claim settlement rate of the health insurance companies while buying the right policy. While a high CSR indicates that the company has a high rate of claim settlement, a low CSR indicates the claim rejection rate is high. It is always advisable to choose an insurance policy that has an excellent medical claim settlement rate.
• Take the time to read the policy’s documents when you purchase the health insurance policy to know all the details about the policy’s features including exclusions, inclusions as well as the waiting period and the claim process.
• Make sure to file your claim within 7 days after discharge from the hospital.
• Keep all the required documents related to your hospitalization in safe custody as failure to attach the relevant proofs with the claim form may result in your claim not being approved.

The Conclusion

The purchase of a health insurance plan has become a must nowadays not just for you but also for your loved ones to protect their hygiene and health. While it is important to choose the right insurance policy with an established track record of claim payment on time, pay equal attention to choosing the right TPA, as the service quality of the insurance firm depends on the third-party administrator in healthcare insurance.