TPA in Health Insurance: Understand its Role and Importance

Health Insurance

What is TPA in health insurance? TPA (full form – Third Party Administrator) is a licensed intermediary between health insurance policyholders and insurance companies. It can be a company, an organisation or an agency with a license from the Insurance Regulatory and Development Authority of India. Insurance companies could outsource claim settlements to TPAs to make the process hassle-free and reduce the overall burden of processing claims. 

Some TPAs also provide certain value-added services. But, is having a TPA beneficial for policyholders? Can a policyholder opt out of TPA service? Read on to get a complete understanding of how TPA in health insurance works, its role, benefits and how to cancel TPA.

What are the Functions of TPA in Health Insurance?

 The functions of a TPA in health insurance are:

• Processing claims and settlements
• Approving cashless claims
• Disbursing claims
• Providing network facilities
• Database maintenance
• Collecting premiums
• Cashless processing for approved hospitals
• Enrolment
• Reimbursing hospitals bills with cash

Some TPAs provide value-added services such as:

• Ambulance services
• 24×7 toll-free helplines
• Medicine supplies
• Specialised consultation
• Health facilities
• Checking available beds

How TPAs in Health Insurance Help the Policyholders?

1. Provides Cashless Claim Facilities

If a policyholder gets admitted to a network hospital and stays for more than 24 hours, the policyholder can apply for a cashless claim (terms and conditions apply). The TPA collects relevant documents from the hospital and reimburses all expenses covered by the health insurance policy. 

2. Assistance with Hospitalisation

TPAs provide health cards that allow patients’ family members to avail of medical facilities from the insurer’s hospital network. They could also provide consultation and emergency and back-end services making it easy for policyholders to get hospitalised. 

3. Reduces Claim Processing Time

The involvement of TPA in the insurance sector has improved the quality of insurance services. They can take a lot of work off insurance companies, reducing the processing time for claims and payments. 

4. Improves Standardisation

As TPAs serve the needs of a large number of hospitals and insurance agencies, they have standardised processes that are helpful for customers.

Apart from being extremely helpful to the policyholders, TPAs play other helpful roles as discussed in the following section.

Also Read: Deductible in Health Insurance: What Is It and How Does It Work?

What is the Role of TPA in Health Insurance?

TPAs play a vital role in processing medical insurance claims:

1. Issues Health Cards

A TPA issues health cards to policyholders that hold details such as the policy number and the name of the TPA, which is required to process the claims. Just producing a health card at the time of admittance can easily get their claims approved. 

2. Helps with Hassle-Free Claim Settlements

An essential role of a TPA is to coordinate between the insurer and hospital for the claim settlement process. They check all the bills and documents submitted by the claimant and cross-check all details before approving a settlement. 

3. 24/7 Toll-Free Helpline Facilities

Many TPAs provide 24/7 assistance to all policyholders. Claimants can easily get helpful answers during emergencies. 

4. Treatment at Network Hospital 

TPAs build a strong network of hospitals, which is essential for cashless treatments. The policyholder can go for treatments in any of these network hospitals and the TPA will take care of the payments on behalf of the policyholder. 

5. Keeps Accurate Records of Claims

TPAs also help keep an accurate record of claims and other data related to the claims in a year. This helps the insurance company keep track of all the settlements. 

There are many TPAs that act as an intermediary between the insurer and policyholders. Check out this list of 20 TPAs:

Also Read: Things To Consider Before Buying A Health Insurance Policy

Top 20 TPAs in Health Insurance

Here’s a comprehensive list of TPA sourced from IRDA’s official website. Please note that the below table is for reference purposes only.

How to Cancel TPA?

If you are not satisfied with the services of your current TPA, you may choose to cancel the TPA. To do so, follow these steps: 

Step 1: Call or email your insurer.

Step 2: Share your Unique ID (UID) and policy details.

Step 3: Explain the reasons for requesting TPA cancellation.

Step 4: After the insurer’s approval, choose another available TPA from the list.

Also Read: How To Claim Health Insurance And What To Do If The Claim Is Rejected?

Final Word

A TPA or Third Party Administrator in health insurance handles all the essential management functions. From record keeping, processing claims and settlements to providing value-added services. TPAs ensure better and high-quality healthcare by allowing policyholders easy and hassle-free access to funds for treatments. 

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FAQs on TPA in Health Insurance

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Disclaimer: This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.