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Health Insurance And Third Party Administrator

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A reliable health insurance can ease part of the tension associated with falling ill. In India, health insurance is gathering momentum, with many state governments tying up with private insurance companies to provide decent health insurance cover for their people. Healthcare in India is seeing a gradual shift of focus from public sector hospitals to private corporate hospitals. However, by and large the common man is still ignorant about the very concepts of insurance. Health insurance is only a component of different types of insurance cover. Understanding the fine print of the health insurance policy will help you understand the scope of the policy and its limitations, which are seldom spelled out by the agent selling you their products. One needs to understand and interpret only the important clauses incorporated under Health Insurance Policy by various Public Sector Undertakings and Private Insurance Companies in India.

What are TPAs in Health Insurance?

A Third Party Administrator is an organization which processes health insurance claims or provides cashless facilities as a separate entity. Seen as an outsourcing of claim processing, Third Party Administrator processes claims for both retail and corporate health insurance policies. The risk of loss incurred remains with the health insurance company. The health insurance company usually contracts a reinsurance company to share its risk. An insurance company hires Third Party Administrator to manage its claims processing, provider network and utilization review. While some Third Party Administrator operates as units of health insurance companies, most are often independent.

Function of TPA in Health Insurance

Here are a few important functions of thethird party administrators in health insurance:

• Hassle-freeclaim settlement

One of the major functions of a TPA is to speed up the processing and settlement of claims. If it is a case of cashless claim, the network hospital coordinates with the TPA to seek pre-authorization for treatment of the insured. It is the TPA’s duty to cross-check if the documents submitted by the policyholder are enough to pass the claim.

• Issuing health cards

It is the responsibility of the TPA toissue the authorized health card to the policyholder to authenticate the issuance of the policy. This card contains details of the policy and the policyholder and needs to be shown at the hospital during admission to apply for a claim.

• Maintaining records

TPAs have to keep a record of important information related to the policyholder while he/she is hospitalized. This helps the insurance company to maintain records for future references.

• Arranging value-added services

A third party administrator also helps in arranging value-added services for the policyholder, such as ambulance service, wellness programmes, referral to surgeons/specialists, etc. The insured can call his/her TPA to avail value-added services covered under the policy.

• Claim assistance

Policyholders can contact their TPAs in case they require any kind of assistance for claim related issues such as claim intimation, document submission, claim status, etc. TPAs have to provide full-fledged customer support and answer the queries of the policyholders.

• Build a solid list of network hospitals

A TPA also assists the insurance company to build a strong list of network hospitals. It tries to get on board the best hospitals with the insurance company that can arrange cashless services quickly and allow rate negotiation.

Conclusion

The Insurance Regulatory and Development Authority of India (IRDA) defines Third Party Administrator as one who, for the time being, is licensed by the Authority, and is engaged, for a fee or remuneration, in the agreement with a health insurance company, for the provision of health services. Third Party Administrator was introduced by the IRDA in 2001.

Being one of the prominent players in the managed care industry, it has the expertise and capability to administer all or a portion of the health insurance claims process. The services include claims processing, premium collection, enrollment and cashless processing. Health insurance companies setting up its own health plan often outsource certain responsibilities to a Third Party Administrator. The Third Party Administrator acts like a claims adjuster for the health insurance company. In some cases the insurance company sets up an entire department within their own company to act as Third Party Administrator as opposed to hiring a commercial Third Party Administrator company.

Hence, along with your health insurance plans, it is important that you are aware about Third Party Administrators as well.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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