What is TPA in Health Insurance?

Third-Party Administrator or TPAs are licensed entities to help policyholder process health insurance claims and avail cashless facilities provided by the insurer. They can be a company, an agency or even an organization as approved by the Insurance Regulatory and Development Authority of India (IRDAI) to aid the claim process, etc. TPAs work as an intermediary between the policyholder and the insurance provider and coordinate with the policyholders, the insurance company and the healthcare provider.

Third-Party Administrators (TPAs) are beneficial not just because they smoothen the claim procedural for the policyholder but also because they help an individual pick the health policy in the first place. Therefore, a person looking to buy health insurance can approach TPAs to get assistance on buying, claiming and renewing a health insurance policy.

More about Third Party Administrators-

To know more about Third Party Administrators, here are some of the commonly asked questions:

1. Who is a Third Party Administrator?

Simply put, TPAs are middlemen appointed by insurance companies selling health insurances. They help facilitate medical bill settlements under a policy claim and even complete the entire procedural like filling the form, submitting relevant documents etc. TPAs make the process hassle-free for the insured by handling it. However, it is important to know that they bare no responsibility if any claim gets rejected.

2. Services provided by TPAs:

These Third Party Administrators, as mentioned, process insurance claims and also helps with filing a claim request etc. Furthermore, they also process specific factors of employee benefit plans acquired for separate entities, services like underwriting, additional insurance-oriented customer services, etc.

3. What is IRDAI and its Significance with Respect to TPAs?

Firstly, the IRDAI stands for Insurance Regulatory and Development Authority of India. Secondly, it acts as a governing body and regulates the insurance market. The IRDAI circular with respect to Third Party Administrators mentions that an insured has the liberty to pick a TPA as listed by the insurer and is regulated by this governing body.

4. How Can One Choose a TPA?

Choosing a TPA is as important as picking the right health insurance plan. The proposer should also look into the TPA’s abilities and result metrics. Compare and contrast the available candidates on the list on the basis of such criteria before opting for one.

Things to Know about IRDAI Circular Relevant to Third Party Administrator-

In accordance with the circular by the Insurance Regulatory and Development Authority of India:

1. The chosen TPA to render health services will be limited to those that have Service Level Agreements with the insurance company.
2. The number of TPAs can be revised by the insurance company on the basis of the chosen policy, and the geographical area.
3. The insuring company has to explicitly mention all the affiliated or engaged TPAs for the insured individual to pick from.
4. These TPAs can be chosen at the time of purchase initiation or during renewals etc.

Features and Benefits of having a Third Party Administrator for a Policyholder-

The concept of TPAs not just benefits for the insurer, for example—a reduction in the false claim ratio and administration charges, standardized treatment cost etc. but also the policyholder in the health-care market. Here are some of the common benefits of having a TPA;

1. The concept of TPAs is advantageous to policyholders because they provide enhanced facilities at a similar price. The TPA will act like a link between the insuring company and the insured wherein all necessary correspondence will occur with the TPA.
2. These TPAs will be well-aware with all latest medical developments with the insured and would be in possession of any relevant medical records. Therefore, communicating would be much easier.
3. Moreover, claim settlements are quick and efficient because of the unique identification number provided to the insured by the TPA, who will handle the entire procedure. They also have an easily accessible helpline number to guide through any health policy claim issues etc.
4. Additionally, most TPAs have medical practitioners in their employee list to help assist them and the insured to make better decisions despite any specific ailment is covered in the policy or not.
5. TPAs can also be changed in case of termination within the policy period and services rendered by replacing them with an alternate from the list of engaged TPAs provided by the insuring company.
6. However, intermittent changes can’t be done. Replacements of TPAs can be done the time of renewal.
7. Policyholders can choose their own TPAs from enlisted names engaged with the company and, in case a TPA is not chosen by a policyholder, the insurer can opt to provide the policy servicing to a TPA of preference.
8. It is also important to note that not all insuring companies have multiple TPAs, sometimes in case of individual TPAs engaged with a company, there would be no list provided to choose form.

Conclusion

In summary, Third Party Administrators are of many advantages as they guide the policyholder through the process of purchasing a health policy, filling claims and even at the time of renewal. They can be an agency, a company, or an organisation licensed by the Insurance Regulatory and Development Authority of India. These approved entities work as intermediaries between the insuring company and the policyholders. Most insurance companies mention explicitly all the TPAs in a list for the policyholder to pick from or to make the choice themselves if required. Similar to picking a health insurance policy, a Third Party Administrator must be carefully chosen.