What is TPA in Health Insurance?

When browsing through health insurance policies and articles, you must have come across the term ‘TPA’ or Third-Party Administrator. It is essential to understand the meaning of this term and the responsibilities associated with it, to get a better comprehension of health insurance. In this article, we discuss what are TPAs and what roles they perform to help you out in your insurance journey. Let’s go.

What exactly is a TPA?

Essentially speaking, a TPA is a kind of intermediary between the health insurance policyholder and the insurance provider. Its primary function is to offer assistance and support to the customer during the claim settlement procedure. It also verifies the authenticity of the claims made and ensures that only genuine claims get settled.

Usually, a TPA is an agency or a company that may work only for one insurer or several insurers to provide their services. The concept of the TPA in India was brought by the IRDAI (Insurance and Regulatory Development Authority of India) in 2001 to help insurance providers handle the increase in the number of insurance products, policyholders, claims, and so on, and provide better offerings to their customers.

Due to the experience of handling the policies of several insurers, a TPA has extensive knowledge of the coverage and exclusions of various health insurance policies.

The role of TPA in health insurance 

Let’s look at the several roles performed by a TPA in health insurance.

  1. Managing policyholder data 

On purchase of a new health insurance policy, the policyholder’s data is shared by the insurer with the TPA. The TPA, then takes care of several aspects relating to policyholder management including but not limited to issuing of policy ID cards, claim settlement, redressal of grievances, providing important information to policyholders, and so on. It maintains a database of the policyholders and their policy details.

  1. Claim settling and processing

In the case of a cashless claim, the TPA coordinates with the hospital for the verification and due payment of bills. All the policyholder has to do is contact the TPA, provide the duly filled cashless request form and other documents. In case of reimbursement, the TPA collects the required documents from the policyholder and reimburses the amount once the verification of the claim is done. In case a disqualified claim needs due attention, it is the TPA who helps out.

  1. Establishing a stronger network of hospitals

It is the duty of the TPA to enlist more hospitals into the insurer’s network. To do so, the TPA factors in several aspects of the hospital – infrastructure, medical facilities, past credentials and performance history, IT support available, and so on. For this purpose, the TPA is required to have an in-house licensed medical practitioner and a hospital manager amongst other professionals.

  1. Customer helpline 

The TPA body has a toll-free number that the health insurance policyholder can contact regarding claim eligibility, the status of a claim made, network hospitals, and any other information relating to their policy.

  1. Other beneficial services

The TPA also provides several value-added services to the customers for their benefit. From arranging ambulances to organizing wellness programs and providing guidance regarding medical specialists, the TPA ensures the customers’ insurance experiences remain smooth and easy.

A point to remember is that the TPA does not charge the policyholder for the services it provides. The cost for these services is a part of the insurance cost, and the TPA body gets paid by the insurers accordingly.

Kindly make sure that you have complete information about the TPA/TPAs of your insurer and their services when you are purchasing a health insurance policy.

We hope this article has increased your understanding of the role and importance of TPA in health insurance.

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