What Is TPA In Health Insurance?

An insurance provider’s claim-settlement ratio is one of the most crucial factors buyers consider while purchasing their insurance policies. To provide policyholders with a seamless claim application and settlement experience without straying away from their core business operations, insurers appoint entities known as TPAs. 

TPA in health insurance stands for third-party administrators. These are organisations, individuals, or entities that are not the insurance providers (first party) or beneficiaries/clients (second party) of an insurance contract. TPAs are instead intermediaries (third parties) who serve as the link between the first and second parties. They specialise in providing efficient administrative services, particularly concerning the claim settlement process. Outsourced by health insurance companies, TPAs’ duties include claim verification, settlement, and establishing tie-ups with hospitals, among other things.

TPA In Health Insurance – Expectations and Services Rendered

The following are the standard services or facilities that a third-party administrator in health insurance is entrusted with by the insurance provider.

• IRDAI Verification

The Insurance Regulatory and Development Authority of India (IRDAI) overlooks all insurance-related matters in the country. TPAs must register themselves with the IRDAI and obtain a license to operate. The IRDAI verification is necessary to protect the rights of policyholders.

• Policy Implementation, Claim Processing and Settlement

TPAs typically comprise a group of highly qualified medical and non-medical personnel, legal experts, IT professionals, etc. They implement policies to help make the claim process as easy as possible. They are also responsible for processing your claims on behalf of your insurer. 

• 24×7 Customer Care

Medical emergencies can knock on your door at any time. TPAs are thus expected to provide assistance 24×7. You can call their toll-free number to initiate the claim process. TPAs also facilitate services like interactive voice response (IVR) and call-backs to offer efficient and prompt services.

• Widening the Hospital Network

TPAs in health insurance have tie-ups with thousands of hospitals across the country. One of the primary services they offer insurance providers is getting hospitals to sign up with the insurer’s network. This service later proves to be a boon for policyholders as it facilitates cashless claims. 

What Is The Role Of TPA In Health Insurance?

To understand what is the role of TPA in health insurance, it is vital to note that they do not and cannot issue insurance policies. However, they can do the following things.

• Issue Health Cards

After you buy a medical insurance policy, the insurer sends your policy details to the appointed TPA. Based on the provided information, the TPA enrols you and other insured members within a policy and issues member ID cards. Also known as health cards, the member ID card allows you to receive cashless treatments across nationwide network hospitals. 

• Facilitate Pre-authorisation for Cashless Claims

When receiving treatment at a network hospital, you must inform your insurer and the TPA before seeking admission. You must fill out a pre-authorisation form before a planned treatment and within 24 hours after emergency treatment. Through pre-authorisation, the insurer conveys to the healthcare facility and the TPA whether the claim is admissible. 

• Process Reimbursement Claims

You may be eligible for reimbursement if you choose to receive treatment at a non-network hospital. The role of TPA in health insurance in such cases is to investigate the claim thoroughly. Professionals employed under TPAs check for discrepancies in the submitted documents and verify whether the claim request is legitimate or not.

• Provide 24×7 Customer Support

It is nearly impossible to predict the occurrence of a medical emergency. Therefore, TPAs must have a solid customer support department to provide efficient services to callers facing medical crises. The TPA helpdesk is available 24x7x365 and offers services through IVRs or text messaging. You can call the TPA’s toll-free number available on the health card. 

• Tie Up With Hospitals

Third-party administrators in health insurance are expected to build relationships and tie-ups with hospitals. TPAs generally assess the hospitals’ track records and quality of service before adding them to the network hospital list. TPAs need to expand their hospital network so that policyholders can choose from a vast network of hospitals and utilise the cashless claim facility. TPAs may form a three-way agreement between the insurer, the hospital and themselves.

• Make Timely Reports

TPAs are also responsible for maintaining all records of policyholders’ applications – from hospitalisation to claim settlement. The TPA must provide management information systems (MIS) reports at fixed intervals to the insurance company and their stakeholders. The IRDAI permits TPAs to share the reports daily, weekly, monthly, half-yearly or yearly.

• Offer Additional Services

Besides claim settlement, TPAs also provide add-on services. As a policyholder, you can avail of services like ambulance transportation, extra beds, health check-ups, outpatient department (OPD) treatments, health talks, yoga sessions, etc., through your TPA. TPAs also tie up with wellness programme providers to facilitate wholesome treatments. You can use your member ID card to avail of such facilities. 

How To Make Claims Via TPA in Health Insurance?

Now that you know what is TPA in health insurance, here’s how you can use their claim services. 

Firstly, you need to inform your insurer and the TPA of your planned medical treatment as early as possible. Planned treatments are surgeries or treatments for which you are undergoing proper diagnosis, and the medical professional has confirmed the need for the procedure. In case of unplanned treatments like heart attacks, strokes, accidents, etc., you must inform your insurer and TPAs within 24 hours of hospitalisation.

Steps to File Claims When Receiving Treatment at Empanelled Hospitals

TPAs usually tie up with a vast network of hospitals. They spot-check to ensure the healthcare facility offers the best medical care. Since the TPA has already verified the hospital, you can enjoy cashless claims, where the insurer and TPA directly settle your bills. The steps to follow to file cashless claims are as follows:

1. Fill out and submit the pre-authorisation and cashless claim form at the earliest before getting admitted to a network hospital for planned treatment. In case of emergencies, you can fill out the form after admission within 24 hours.
2. The hospital sends your medical reports and bills to the TPA.
3. The TPA verifies the data and determines whether or not to approve the claim. 
4. If the claim is approved, the TPA settles your medical bill with the hospital on the insurer’s behalf.

Steps to Follow When Receiving Treatment at Non-empanelled Hospitals

You also have the choice to receive treatment at non-network hospitals and file reimbursement claims. Once you are discharged from the hospital, you can begin the claim reimbursement process. Just follow these simple steps.

1. Reserve the original copies of all medical reports, documents, and medical bills. 
2. After being discharged from the hospital, you must send these documents along with a copy of your medical insurance policy in either physical or electronic form to the TPA within 30 days of the discharge date.
3. The TPA can take anywhere between two weeks to a month to review your documents and ask for additional documents if required.
4. The insurer approves the claim and credits the claim amount to your registered bank account.

Note that you must bear non-medical expenses like food, water, toiletries, etc. Also, the insurer may reject your claim if your documents are not in order. Discrepancies like non-disclosure of pre-existing conditions, received treatment for excluded conditions or diseases, filing a claim after the time limit has passed, etc., are also instances wherein the insurer can reject your claim.

Benefits Of Third-Party Administrators In Health Insurance

By appointing TPAs, insurance companies are at an obvious advantage. TPAs help insurers streamline the claim process and reduce the number of fake claims. However, when it comes to understanding what is a TPA in health insurance, you should also know how a TPA’s role impacts policyholders. 

• You can avail of customer support, right from hospitalisation to discharge, through the TPA.
• You can receive proper guidance for documentation and claim settlement procedures.
• The TPA member ID cards aid you in receiving cashless treatments.
• The TPA is at your service round-the-clock.
• TPAs can offer prompt and efficient claim settlements as that is their sole business module.
• You can receive treatments under government schemes as well.

Government Schemes & TPAs

In recent years, the Government of India has rolled out numerous healthcare schemes to empower marginalised communities. Numerous TPAs may also offer claim settlement services for such schemes. A few popular government schemes include the Rashtriya Swasthya Bima Yojana (RSBY), Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) and state-wise health insurance schemes. 

What You Should Know About TPAs In Health Insurance

TPAs are individual companies licensed by the IRDAI to settle claims on behalf of the insurance company. However, there are certain limitations that you, as a policyholder, should know about when understanding what is TPA in health insurance:

• They are not the decision-makers.

TPAs cannot decide whether your claim gets approved or rejected. They are only responsible for verifying your medical documents and processing the claim. The final decision falls on the insurance company.

• They cannot charge you money.

Since TPAs are employed by the insurance company, you are not liable to pay any additional charges for settling claims. You should report such payment requests to your insurer. 

• They are independent of the insurance company.

TPAs cannot issue health insurance policies. You should take up any grievances against the insurer with the insurer’s grievance redressal cell. 

• Insurers often employ multiple TPAs.

Depending on their claim settlement process and network hospitals, some TPAs may be more influential in some cities than others. Therefore, insurance companies may hire more than one TPA. 

• You may have the option to change TPAs.

If your current TPA is unable to meet your requirements, you can inform your insurance provider. Your insurer may let you select another TPA from the list of available TPAs.

List of TPA Agents

An organisation registered under the Companies Act, of 1956, with a share capital, can operate as a third-party administrator. TPAs must register for the license with the IRDAI and renew it every three years. As on 30th September 2022, the following TPAs can carry our administrative health insurance duties across the country.