All About Third Party Administrator You Need to Know

The scope of health insurance is quite broader as compared to other types of insurance hence due to this wide scope, it involves a lot of technicalities and this is where TPA comes into the picture. TPA or the Third-party Administrator is a company/agency/organisation operating under an Insurance Regulatory and Development Authority of India (IRDAI) licence. TPAs are mandated by insurance companies to ensure cost-effective, timely, and hassle-free claim processing. A TPA can be assigned to multiple insurance companies. TPAs typically function as units of health insurance companies, but may also function independently. A health insurance TPA can help provide claims support, claims processing, and  cashless capabilities to policyholders. The TPA team consists of the following members: general practitioners (registered with the Medical Council of India), insurance advisors, legal experts, hospital managers, business advisors, IT experts.

How Does a TPA Function? 

TPA is a third-party company licensed by the IRDAI to provide management solutions to health insurance companies. It is an intermediary between insurers and policyholders to ensure a smooth and cashless and reimbursement claim processes. When a policyholder needs treatment, the individual contacts the TPA of the insurance company. TPA informs customers about the nearest network hospitals and assists in the application process. Upon discharge, all  medical expenses will be sent to and paid for by the TPA. TPA will check your medical costs and compare them to previously negotiated tariffs. Once all  documents and invoices are approved, the costs will be invoiced directly or reimbursed by the company. 

Role of the Third-party Administrator

• Single Point of Contact Between Insurance Companies and Policyholders

The health insurance company's third-party administrator acts as an intermediary between the insurance company and policyholders. In the event of a claim-related issue, the insurance company will contact the TPA involved.

• Maintaining Policyholder Records

After the policy is issued, all records regarding the policyholder are transferred to the TPA. The TPA maintains a database of policyholders and assumes almost all liability to the insured. It will issue the policyholder an ID card with her unique ID number. 

• Billing Reconciliation

Among the various third-party managed services, this is one of TPA's most important features. The TPA will coordinate the claims resolution process with the hospital. The hospital splits the bills related to the policyholder's treatment. The TPA team will conduct the review according to the terms  of the policy. If the TPA has questions about your bill, they may ask for a second opinion or consult your hospital records.  

• Cashless Processing

When policyholders receive treatment at network hospitals, third-party administrators assist with cashless claims processing. All documentation related to the  treatment received will be made available to the TPA. Paperwork will be checked by the TPA and hospital bills will be paid as per the insurance policy. For cashless payments, it is necessary to visit a hospital networked by the insurance company. 

• Hospital Network

A third-party health insurance manager is responsible for building a hospital network for cashless services. When adding hospitals to the network, consider the infrastructure, facilities  the hospital provides along with its track record. When you purchase health insurance, you will receive a kit containing a guide and a list of network hospitals. Additionally, you can learn about  network hospitals from third-party administrators for hassle-free, cashless treatment.

• Service Centre Maintenance

A final critical task for a third-party provider is maintaining a full-fledged 24-hour customer service centre where policyholders can call and answer questions. Inquiries regarding health insurance, eligibility, insurance claim settlement, insurance settlement status, affiliated hospital, etc. are all handled at the counter. These service centres can be accessed from anywhere in the country.

• Add-on Facilities

In addition to the services above, insurance administrators also assist with add-on services such as ambulances, bed availability, lifestyle management, medical supplies, and healthcare facilities.

Benefits of Third Party Administrator in Health Insurance

• Easily Accessible

TPA's 24-hour customer service helps improve service availability. Policyholders always have questions about their health insurance and can contact their TPAs and get the same resolved quickly. 

• Standardised Procedures

There is  standardisation of procedures by  TPA. The TPA team has professional skills and technology. All health insurance processes are carried out with the utmost care. TPAs will develop protocols to streamline investigations and avoid delays in claim settlement. 

• Increased Reach and Penetration

The involvement of third-party administrators in the health insurance industry and improved services are making people more aware of the benefits of health insurance. 

• Less Likelihood of False Claims

The TPA team is made up of experts from various industries.It helps improve service quality, avoid false charges, limit unnecessary treatments and minimise insurance company costs. It also expands the knowledge base of medical services.

Conclusion

There are several challenges for TPAs to work effectively such as low awareness among people for TPA's, reliance on insurance agents, additional costs, etc. However, health insurance TPAs ensure claim settlement, cashless invoicing, and day and night customer service on time, helping it outweigh these challenges. Hence, leverage the benefits provided by the TPA and enjoy timely and cost-effective processing of health insurance applications.

Read more - Third Party Administrator TPA Role in Health Insurance