TPA In Health Insurance: How to Choose the Best One

Posted on: Mar 14, 2023 | | Written by: HDFC ERGO Team

TPA In Health Insurance: How to Choose the Best One

Health insurance plans are crucial for securing the future of individuals and their families. However, whether you buy the best health insurance in India or family health insurance, managing health insurance claims can be a daunting task, which is why many insurance providers hire Third-Party Administrators (TPAs) to manage the claims process. Choosing the best TPA is essential, as it can impact the speed and accuracy of claim processing, which in turn affects the quality of service provided to policyholders.

What is a TPA (Third Party Administrator) in Health Insurance?

A Third Party Administrator (TPA) is an intermediary between the insurance company and the insured. In health insurance parlance, TPA is an organisation or body that processes your health insurance claims on behalf of the insurance company. TPAs handle everything from enrolment and claim processing to cashless hospitalisation, claim settlement and value-added services like wellness programmes, ambulance services, availability of beds, consultation, etc. Licensed by the IRDAI, third-party administrators in health insurance work with hospitals and healthcare providers to make sure policyholders get timely and appropriate treatment.

How to choose the best TPA?

Choosing the best TPA is important for smoothly processing your hospital bills and other related expenses. Hence, while choosing a TPA for health insurance plans, consider the following factors:

1. The TPA should be regulated and licensed by the Insurance Regulatory and Development Authority of India (IRDAI).

2. Choose a TPA that offers the services that you require, such as cashless hospitalisation, disease management, pre-authorisation, well-being programmes, etc.

3. The third-party administrator in health insurance must have a good reputation in the industry. You can check online customer reviews, ratings, and the quality of services offered and then take a decision.

4. Check the claim settlement process of the TPA. If it is transparent and smooth, rest assured your claims will be processed without any hassles.

5. Look for a TPA with a wide network of hospitals and healthcare providers. This will give you options to choose the hospital of your choice.

6. TPA of your health insurance plans should have good round-the-clock customer support to help you in times of need.

7. While some insurance companies offer TPA services for free, others may charge a fee. Based on your needs and budget, you can choose the right TPA.

Things to know about TPAs

1. TPAs are intermediaries between the insurance company and policyholders. They are not insurance providers and do not sell any insurance products.

2. TPAs are licensed by the IRDAI.

3. The primary role of the third-party administrator in health insurance is to ensure the claims filed by the policyholder are settled smoothly. On behalf of the insurance company, the TPA checks the coverage of the health insurance plan, whether individual healthcare plan or family health insurance, calculates the compensation amount, and then gets the claim processed.

4. Apart from claim processing, some TPAs offer value-added services like wellness programmes, ambulance services, disease management, etc.

5. TPAs have tie-ups with hospitals and healthcare providers.

What services does a TPA provide in the health insurance industry?

1. Issues health cards to policyholders:

When you buy health insurance plans, the TPA will issue an authorised health card which will contain the details of your policies and TPA. You need to produce this card at the network hospital for claims processing.

2. Claim processing and settlement:

The primary job of a third-party administrator in health insurance is to offer end-to-end support with regard to claim settlement and processing. The TPA will check all the documents submitted by the policyholder, verify the details and then settle the claim, whether cashless or reimbursement. The TPA is also responsible for expediting the claim as soon as it is raised by the insured.

3. Record keeping:

The TPAs maintain a record of all the documents related to the healthcare plan of the policyholders, as it is crucial during the claim settlement process.

4. Check and onboard hospitals:

Before including a hospital in the list of network hospitals of an insurance provider, the TPA checks whether the hospital meets the criteria. After carefully reviewing if all the parameters are met, the TPA includes it as an empanelled hospital with the insurance company.

5. Dedicated support:

Most TPAs provide 24x7 service and support to policyholders. They can directly call or email the customer support team regarding any claim-related doubts or other information.

6. Additional services:

Other than claim processing, the TPAs also offer services like supplying medicines, ambulance support, well-being programmes, etc.

What are the advantages of using a TPA for health insurance claims processing?

1. As TPAs have the expertise and experience in handling claims and follow a standard procedure, the claims are processed efficiently and smoothly, which is beneficial for both the insurer and the insured.

2. The 24*7 dedicated customer support of TPAs may help policyholders in filing and tracking claims or any other issues related to coverage and benefits. The support team helps in getting their issues resolved.

3. At the time of claims processing, TPAs can identify fake and fraudulent claims due to their vast experience in the industry. This helps manage risk and save the costs of the insurance provider.

4. Having a TPA is cost-effective for health insurance companies.

5. The TPAs help policyholders become more aware of the benefits and also help in better understanding the terms and conditions of policies.

6. With the help of technology, TPAs can automate tasks making the claim process streamlined.

What are the disadvantages of using a TPA for health insurance claims processing?

1. How quickly a health insurance claim will be settled depends on the efficiency of the TPA. If the TPA is inefficient in claim processing, it can lead to delays in settling the medical bills.

2. Since the claims are handled by TPAs on behalf of health insurance companies, the insurers do not have much control over the claims process.

3. If TPAs do not have a wide network of hospitals, you will have access to limited hospitals for cashless facilities. If you visit a non-network hospital, you must opt for a reimbursement claim.

Frequently asked questions

1. What is the difference between a TPA and a health insurance company?

TPAs act as intermediaries between insurers and policyholders. On the other hand, the insurance company lets you choose the TPA from a list of TPAs registered with the insurer after issuing the policy. Once you select the TPA, it takes charge of the claim settlement process instead of the insurance provider.

2. Can I choose the TPA?

Yes, you can choose a TPA, but it should be registered with the insurance company. You can do this at the time of buying the health insurance policy or at the time of renewal.

3. Can a TPA reject my claim if my insurer approves it?

Normally, a third-party administrator in health insurance cannot reject the claim if your insurer has approved it. However, the TPA can still check if the claim raised meets the policy’s terms and conditions and may make a recommendation to the insurance provider regarding payment.

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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