As people realized that health emergencies could arise at any time, the insurance companies started developing improved policies, various health products, etc. Too many service offerings made it difficult for the insurance companies to give out quality service delivery alone, eventually leading to the advent of Third-Party intermediaries by the Insurance Regulatory and Development Authority of India (IRDAI).

What is a Third-Party Administrator?

According to IRDAI, a Third-Party Administrator (TPA) is defined as a company registered with the Authority and engaged by an insurer, for a fee or by whatever name called and as may be mentioned in the health services agreement, for providing health services. A TPA may render the following services to an insurer under the agreement in connection with health insurance business:

  • Insurance processing services delivered
  • To process health insurance claims.

What are the various roles of a TPA?

A TPA plays an indispensable role in the complete processing of a health insurance claim. The part of the TPA is massive when it comes to the health insurance sector, some of which include –

1. Smooth and holistic claim processing and settlements

A TPA is responsible for expediting a health insurance claim as soon as the policyholder intimates them. TPAs can choose to come up with their services to ensure seamless service delivery. Their job is also to check all the documents submitted by the policyholder responsibly and thoroughly and ask for as much information from them to do the same.

These claims could either be cashless or reimbursement. In the former’s case, the TPA can collect the documents from the hospital directly. In the latter’s case, the TPA asks for supporting documents and bills from the policyholder.

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2. Extend value-added services, or improvise the existent for the policyholder

Other than claim processing, a TPA is also responsible for sharing knowledge about health insurance to policyholders and improve their services to ensure seamless service delivery. Moreover, they arrange for other services that a customer might need, like – ambulance, emergency assistance, well-being programs, etc.

3. Issue health cards/ecards to the policyholder and their dependents

For every policy that a TPA issues to the policyholder, they need to validate the same. The procedure is accomplished by issuing health cards/ecards that hold the policyholder’s details, dependents, the TPA responsible for claim processing, and policy number. A policyholder can show these cards at the time of their admission to the hospital’s insurance desk, ensuring intimation to the TPA or the insurer about the same so they can be prepared.

4. Provide dedicated helplines for policyholders to reach out to

All policyholders should have access to information and assistance regarding their claims. A TPA is responsible for setting up helplines so that policyholders can reach out to them by calling them/emailing them. This facility should be available 24X7 for customers and needs to be Pan India.

5. Have a large network of hospitals and nurture existing providers

The TPA will have a list of network providers and on an ongoing basis, they will further try to enlist more hospitals across the country that can quickly arrange for cashless at negotiated rates, benefiting the policyholder.

For the reasons listed above and more, a TPA is central to a policyholder, the hospital, and the insurance company to work in tandem. Respective TPAs have many of their services and features that further enhance their service delivery systems and make the lives of insurers, agents, policyholders, and hospitals easier. Check them before you enroll a TPA to process your claims, and if you are a corporate employee with a TPA onboarded already, read the terms and conditions to set the right expectations for your group medical coverage.

By Satish Gidugu, Director, Medi Assist Insurance TPA Pvt. Ltd