The role of TPAs in health insurance

Third Party Administrators (TPAs) are entities that take over the function of processing a claim when an insured person submits the claim at the insurance desk of a hospital. The insurance companies outsource the work of processing claims of the insured to the TPAs which are professional organisations holding licence issued by the Insurance Regulatory & Development Authority of India (IRDAI). The TPAs act as intermediaries between the insurance company, healthcare provider and the policyholder and thereby provide vital services to the medical and insurance industry.

The TPAs scope of activities is wide and covers all aspects relating to healthcare and insurance. The basic function of the TPAs is to process the claims of the insured and settle their hospital bills, whether cashless or reimbursement. Their role begins when the insured submits intimation about treatment at a hospital. If the policy is for cashless treatment, the TPA approves the same, and if the insured submits a claim for reimbursement of bills for medical treatment and hospitalisation, the TPA disburses the same as per the terms defined in the policy document.

The TPAs may also provide other value-added services such as arranging an ambulance for carrying the patient and ensuring availability of bed at the hospital, making available medical supplies, conducting wellness programmes, managing and updating the database of the patients and the network hospitals, collection of premiums, etc.

The TPAs have ushered in greater efficiency in delivery of healthcare services and reduced the time required in settlement of claims. They have achieved this by standardising procedures and putting in place systems that help avoid delays and hassles for the insured. Hence, TPAs have played a vital role in the growth of the insurance industry in India.