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How to choose the best TPA for health insurance claims?

Team AckoNov 17, 2023

Claiming against your health insurance policy may seem tedious, especially if it is your first time. In this regard, a Third-party Administrator (TPA) can make things easy. Note that some insurers may allow policyholders to choose a TPA as per the chosen plan, while others may not. Read on to learn more about how a TPA can help you when it comes to a health insurance claim

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Contents

What is a Third party administrator in Health Insurance?
How to choose the best TPA?
Things to know about TPAs
What services does a TPA provide in the health insurance industry?
What are the advantages of using a TPA for health insurance claims processing?
What are the disadvantages of using a TPA for health insurance claims processing?
Frequently asked questions

What is a Third party administrator in Health Insurance?

A third-party administrator (TPA) is an organisation that processes and pays health insurance claims on behalf of a health insurance company. In India, TPAs are used by insurance companies to provide services such as cashless hospitalisation, pre-authorisation of treatments, and claim settlement. They can also offer value-added services such as disease management and wellness programs.

TPAs work with hospitals and other healthcare providers to ensure that policyholders receive timely and appropriate medical treatment. They handle the administrative tasks involved in processing claims, including verifying coverage and calculating the amount to be paid out. TPAs are typically independent organisations that contract with insurance companies to provide these services.

How to choose the best TPA?

When choosing a TPA, it's important to consider the following factors.

Reputation

Look for a TPA with a good reputation in the industry. You can research online to see what others say about the TPA.

Services offered

Consider what services the TPA offers, such as cashless hospitalisation, pre-authorisation, and disease management. Make sure they offer the services that you need.

Claim settlement process

Look for a TPA with a transparent and efficient claim settlement process. You want to be sure your approved claims are processed smoothly.

Network of healthcare providers

Check to see if the TPA has a wide network of healthcare providers, including hospitals, clinics, and other providers. This will give you more options for treatment.

Cost

Consider the cost of the TPA's services. Some insurance companies may offer TPA services for free, while others may charge a fee.

Customer service

Good customer service is essential, especially when dealing with a medical issue. Look for a TPA with a track record of good customer service and responsiveness to policyholders' needs.

Things to know about TPAs

Here are a few things you should know about TPAs.

1. TPAs are not insurance companies

TPAs are separate organisations that provide administrative services to insurance companies. They do not underwrite or sell insurance policies.

2. TPAs are regulated

In India, TPAs are regulated by the Insurance Regulatory and Development Authority (IRDA).

3. TPAs can help with claim settlements

TPAs can assist with the claim settlement process by verifying coverage, calculating the amount to be paid out, and processing the claim on behalf of the insurance company.

4. TPAs may offer additional services

In addition to their core functions, some TPAs may offer value-added services such as disease management and wellness programs.

5. TPAs may have a network of healthcare providers

TPAs often have partnerships with a network of healthcare providers, such as hospitals and clinics that have agreed to accept certain insurance policies. This can make it easier for policyholders to access medical treatment.

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

Third-party administrators (TPAs) provide various services in the health insurance industry. Here are a few examples.

Claims processing: TPAs handle the submission and adjudication of claims on behalf of health insurance companies.
Utilisation review: TPAs may review and approve or deny certain medical treatment or procedure requests as per the insurer's terms and conditions.
Provider networks: TPAs may manage networks of healthcare providers that are available to policyholders.
Plan design and consulting: TPAs may work with clients to design and implement employee benefit plans.
Data analysis and reporting: TPAs may analyse claims data to identify trends and help clients make informed decisions about their health insurance programs.
Customer service: TPAs may handle customer service inquiries and assist policyholders with navigating their health insurance benefits.

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

Here are the advantages of using a TPA for health insurance claims processing.

Advantage	Description
Expertise	TPAs specialise in handling claims and have a deep understanding of the claims process, which can help ensure that claims are processed efficiently and accurately.
Cost savings	Using a TPA for claims processing can be more cost-effective for health insurance companies compared to handling claims in-house.
Enhanced customer service	TPAs may provide dedicated customer service teams to assist policyholders with submitting and tracking claims, answering questions about their benefits, and resolving any issues that may arise.
Streamlined process	TPAs can help streamline the claims process by using technology to automate tasks and reduce the need for manual processing.
Risk management	TPAs can help manage risk by identifying and addressing potential issues with claims, such as fraud or abuse.
Flexibility	TPAs can be flexible and tailor their services to meet the specific needs of their clients.

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

The disadvantages of using a TPA for health insurance claims processing are as follows.

Disadvantage	Description
Complexity	Working with a TPA can sometimes add an extra layer of complexity to the claims process, as the policyholder must approach the TPA to raise a claim with the insurance company.
Potential for delays	If the TPA is inefficient in processing claims, it could lead to delayed payment for medical treatment or procedures.
Limited control	Health insurance companies and employers may have less control over the claims process when using a TPA, as they rely on the TPA to handle claims on their behalf.
Limited provider networks	Some TPAs may have smaller provider networks, which could limit policyholders' access to certain healthcare providers.

Also read: Family health insurance plans

Frequently asked questions

Here are some common questions about TPA for health insurance claims.

How does a TPA differ from a health insurance company?

A TPA is a separate company that provides administrative services to health insurance companies.

Can a TPA reject a claim that my health insurance company has approved?

Generally, a TPA cannot reject a claim that the health insurance company has already approved. However, a TPA may review a claim to ensure that it meets the terms of the insurance policy and may make a recommendation to the insurance company regarding payment.

Can a policyholder choose their TPA in a health insurance plan?

The answer depends on the specific health insurance plan offered by the insurer. Some plans allow policyholders to choose their TPA, while others do not.

Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet, and is subject to changes.