The Role of Third Party Administrators (TPAs) in Health Insurance

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Third party administrators (TPAs) are firms that provide administrative services in the health insurance field. In most cases, TPAs provide various services like claims processing, premium collection, underwriting, etc. In certain cases, they may also provide customer service on behalf of an insurance company. TPAs handle the administrative part of insurance, and they charge some fees and commissions from insurance companies for their services.

In order to function as a TPA, a company must obtain a license from the Insurance Regulatory and Development Authority of India (IRDAI). They serve as an intermediary between an insurance company and its customers. In India, TPAs are used by many public sector general insurance companies. In the private sector, some firms outsource their administrative activities to TPAs whereas some firms prefer to handle these tasks on their own.

Need for TPAs

For some companies, handling the health insurance administration could be a huge task. Every day, hundreds of customers apply for claim settlement or cashless treatment request. Without a proper administrative team, an insurer may not be able to handle these tasks effectively. A third party administrator, on the other hand, is fully equipped to deal with these tasks. Some of the key benefits of using TPAs in health insurance include:

• Greater stability
• Lower costs
• Improved standardization
• Steady management
• Lower delays

Major activities of TPA

Third party administrators are typically involved the following tasks:

• Premium collection
• Utilisation review
• Customer enrollment
• Database maintenance
• Value-added services (ambulance services, health facilities, consultation, etc.)
• Reimbursement claim processing and settlement
• Cashless treatment approval

Cashless treatment approval

One of the major tasks handled by third party administrators involves providing approval for cashless treatment requests. The insured typically contacts the TPA through the network hospital and files a cashless treatment request. Once the details are submitted, the TPA will verify the claim request and determine its validity. Upon verification, the TPA will provide the authorisation for cashless treatment. Timing is crucial when it comes to cashless treatment. A TPA must verify all the details thoroughly and provide the approval within a few hours.

Challenges in TPA related services

Though TPAs provide a valuable service in the administration of health insurance, the process comes with its own set of challenges. Some of these challenges can be listed as follows:

• There are no specific mechanisms set by the IRDAI to effectively appraise the performance of third-party administrators. Hence, TPAs are typically measured in financial performance rather than customer satisfaction.
• Awareness among customers about the role of TPAs is still very low in the health insurance industry. Policyholders are also unaware of the extra premium amount charged by insurers for the service of TPAs.
• For the process to be effective, TPAs must be well trained in the administrative process. If the TPAs have poor training and inadequate experience, they may not be able to take care of the needs of policyholders.
• TPAs must also have the staff personnel to take care of the administrative needs of health insurance. Effective claim processing requires the services of doctors, management consultants, legal experts, hospital managers, etc. Hiring all these professionals and ensuring adequate training for them is a major challenge for a firm involved in this service.
• TPAs are mainly used to eliminate delays and ensure effective claim processing. However, there are many cases where TPAs have contributed to the delays in claim settlement.

Some of the Third Party Administrators in India

There are many third party administrators operating in the Indian health insurance market. Some of top administrators in the field can be listed as follows:

• Safeway TPA Services Pvt. Ltd
• Medi Assist India TPA Pvt. Ltd
• Vipul Med Corp TPA. Pvt. Ltd
• Raksha TPA Pvt. Ltd
• United Healthcare Parekh TPA Pvt. Ltd
• Dedicated Healthcare Services TPA (India) Private Limited
• Spurthi Meditech TPA Solutions Pvt. Ltd. No.
• MD India Healthcare (TPA) Services (Pvt.) Ltd
• Heritage Health TPA Pvt. Ltd.
• Ericson TPA Healthcare Pvt. Ltd
• Family Health Plan (TPA) Ltd
• Focus Healthservices TPA Pvt. Ltd
• E Meditek (TPA) Services Ltd
• Rothshield Healthcare (TPA) Services Limited
• Vidal Health TPA Private Limited
• Sri Gokulam Health Services TPA (P) Ltd

FAQs on Third-Party Administrators

1. I had purchased a health insurance policy in Bengaluru and I have now relocated to Pune. Can I still avail services from the TPA?

Yes, as long as the hospitalisation has been made within the country, the services of the TPA can be taken from anywhere around India.

2. Where can I find a list of network hospitals of a TPA?

At the time of purchase of the policy, the TPA will provide a list of network hospitals. Alternatively, you can visit the official website of the TPA to find a list of network hospitals.

3. What should I do if I lose the ID card provided by the TPA?

If you lose your ID card, inform the TPA. They will issue a duplicate ID card. Depending on the TPA, they will charge nominal fees to issue a duplicate copy.

4. There is a mistake in the ID card provided by the TPA, what should I do about it?

Contact the customer care department of the TPA and inform them about the mistake on the card. In most cases, they will ask you to return the card and ask you to specify the mistake so that a new card can be issued with no mistakes. In case of any queries, you can always contact the TPA. They will guide you through the process.

5. What is pre-authorisation?

To avail the cashless service in network hospitals, the insured person will have to get pre-authorisation from the TPA. The individual will have to provide information about his/her policy and treatment being availed. The TPA will verify the details and provide an authorisation letter specifying the maximum limit up to which the treatment can be covered under the policy. The rest of the expenses will have to be borne by the insured individual.