When researching health Insurance, you could come across the word ‘TPA’. The full form of TPA is Third Party Administrator. It is essential to get familiar with this term and understand its function before moving on to the more complicated aspects of the process. To help you make informed decisions, this article will tell you everything you need to know about third-party administrators. 

What is a TPA in Health Insurance?  

When it comes to Health Insurance, a third-party administrator (TPA) is a company that acts as a third party in an agreement for health insurance and manages the claim settlement aspect of the contract between a policyholder and an insurer. The following are some key aspects that can assist you in understanding TPA.

• In the event of a claim for hospitalisation, the TPA acts as a liaison between the insurance provider and the insured.
• The health insurance provider selects which TPA to work with.
• TPAs make the process of settling claims easier by administering responsibilities such as dealing with documentation and paying hospital bills. Tpas also help with other administrative chores.
• The Insurance Regulatory and Development Authority of India is in charge of issuing licences to TPAs (IRDAI).
• The process of settling claims is made easier when insurers work with third-party administrators (TPAs).
• Many insurers can be affiliated with a single TPA.

Where does the third-party administrator fit into health insurance?

Creating a connecting link

Every time there is a claim for hospitalisation, the policyholder communicates with the TPA, either directly or indirectly. The TPA provides the patient with an ID card as well as a Unique Identification Number, both of which are helpful in the process of claim settlement. Therefore, the TPA acts as the connection between the insurance company and the policyholder in the processing of claims and the process of availing oneself of the hospitalisation cover.

Keeping of records

The TPA is responsible for keeping track of vital data relating to the policyholder throughout their time while in as a patient. The information is kept in a database that is specifically designed for it.

Claim settlement

Within the framework of the cashless claims settlement procedure, the function of a TPA is essential. Since the bill is settled directly between the insurance company and the hospital in a cashless claims procedure, the insurer and the hospital must work together and coordinate. In these kinds of circumstances, the TPA provides help on the backend.

Support constantly available

Many TPAs provide policyholders with access to a support system available 24/7. The provision of such assistance is facilitated, in part, by call centres and mobile apps.

Hospital enrollment

TPAs are responsible for a variety of tasks that are connected to hospital enrollment. They examine the hospitals to see whether they fulfil the requirements necessary to be included in the network of hospitals (tie-ups for hassle-free claim settlement).

Extra services

There is a possibility that some TPAs may provide additional services to their policyholders, such as ambulance transport, additional beds, and medication supplies, among other things.

The pressing need for TPAs

According to analysts of the industry, TPAs have the potential to bring about the following changes:

• Improved quality and delivery of services
• A higher level of standardisation (procedures and due diligence)
• Enhance the informational foundation of healthcare services
• New management system
• Increased numbers of people with health insurance
• Minimise costs/expenditure
• Streamline the research by developing procedures that can help you avoid avoidable delays.
• Create conditions that will lead to reduced insurance prices.

Despite this, there is a significant gap between the goals of TPAs and the reality of their day-to-day operations in the field. Consequently, it is not yet clear whether or not TPAs are effective in the rapidly expanding and intricately regulated health insurance market. 

Revenue model of TPAs 

It is believed that the degree to which TPAs are successful will be proportional to their organisational structure and the methodology they use to generate money. The IRDA establishes fees or commissions on premiums as the primary source of income for TPAs. These fees and commissions adhere to industry standards. The following are some of the numerous sources of income that are available to TPAs:

• Benefit management
• Provider network management
• Data management
• Medical management
• Claim Administration

Benefits of TPAs 

Policyholders can benefit in the following ways by using third-party administrators for their health insurance. TPAs provide the insurance company with aid in the resolution of claims, which is the most evident advantage for the insurance business. But how exactly does a reliable third-party administrator of health insurance assist the policyholders? The information you need may be found in the following points.

• Providing policyholders and patients with identification cards.
• Help in determining the appropriate kind of documentation.
• Efficient cashless claims settlement method.
• Support for customers around the clock.
• Making the whole procedure of settling claims less complicated. 

Challenges that negatively impact TPAs

• Low TPA knowledge among the general population and insurers. According to statistics, many customers are unaware that insurance firms charge an additional premium for TPA services. Similarly, many consumers do not check relevant information about cashless hospitalisation and exclusions contained in insurance contracts.
• Unreasonable delay in issuing identification cards to insurance holders.  
• The reliance of policyholders on insurance agents rather than TPAs. In many instances, policyholders do not distinguish TPAs from their insurance agents and, surprisingly, have greater trust in the latter. 
• The majority of institutions lack sufficient proof that TPAs increased patient turnover. 
• Although the major objective of outsourcing claims settlement is to reduce the claim term, claims processing is often plagued by delays.
• The insured lack appropriate awareness about hospitals participating in cashless treatments.
• Many hospitals also report incurring extra costs to effectively coordinate with TPAs to offer treatments to policyholders.
• Informational disparity
• Weak networking
• Unreasonable delay in issuing identification cards to insured
• Insufficient standardisation methods regarding charging.
• Underreporting in healthcare facilities

Steps to cancel TPAs in health insurance

TPAs are considered to be facilitators. In addition, if there is a delay in the delivery of the services, you may call your insurance company, and they will coordinate with the TPA and keep you updated on the situation. 

Discussing a change in service like this with your insurance provider is something you should do if you feel the need to terminate your current third-party administrator (TPA) or move to another TPA. The following is a list of the actions that need to be taken to cancel the TPA in health insurance.

• Get in touch with your insurer by phone or by sending an email.
• Please include the specifics of the policy as well as any unique IDs (UIDs).
• Please provide an explanation for the TPA cancellation.
• If the insurer agrees to the modification, choose another TPA from the list provided. 

List of the top Third-party Administrators in India

Mentioned above is a list of Third-Party Administrators for health insurance. Please consider that the goal of mentioning this data is to provide you with information. It is recommended that reasonable judgement and verification be used.