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The benefits of a health insurance policy are abundant, which is now seen apparently by many, thanks to the claims made amid this epidemic. In a time when the cost of treatment is increasing, health insurance plans make it easier for people to worry less about their expenses, but instead, be focused on their overall health and recovery. If you’re an insurance policyholder or looking to buy health insurance, you might have heard of the term “TPA” and would have wondered what it meant and what is TPA in insurance. This article will assist you in understanding the TPA’s definition and its role when it comes to the health insurance industry.
Priya Shenoy, aged 32 years, works for a start-up company as a designer. She got hospitalized for a medical condition and was advised immediate surgery. In the limited time available, she informed the third-party administrator (TPA) of her health insurance company about the planned hospitalization. Fortunately, the hospital in which Priya was supposed to undergo surgery was part of the TPA network, so it was quite easy for her to get cashless approval. In the next 2 days, she underwent surgery with the entire medical expenses being taken care of by the insurer. Because of the health insurance TPA, her admission to the hospital and cashless claims were approved very quickly without any huge requirement of paperwork.
The TPA full form is Third party administrator. According to the Insurance Regulatory and Development Authority of India (IRDAI), the third-party administrator can be defined as a business that is appointed to assist a health insurance firm in providing health insurance-related services, such as policy servicing, claims processing, and customer service to policyholders. They can be called as an intermediary for the insurance company and the policyholder, thus ensuring the process of settlement for claims is handled efficiently.
However, there’s also an internal claim department in some insurance companies, established by the insurer, under its wings, to process claims raised by policyholders. In these cases, there isn’t a TPA involved, and all needs that are related to the health insurance policy are dealt with by the insurance company directly.
As increasing numbers of people are brought into the health insurance fold, the task of managing everyone is a major challenge for insurance companies because it demands a lot of manpower. This is where the function of a TPA insurance is vital as a single point of communication for the policyholder who needs his/her concerns addressed. For the insurer, they can concentrate on introducing newer policies that benefit all people. The role of TPA in health insurance extends in many other areas as well, as explained below:
While the largest insurance companies have their own in-house claims division, even then sometimes they as well as the new-age insurers collaborate with TPAs to share the work. Here are the important reasons and benefits of choosing a TPA over internal department for settlement of claims.
If you’re interested in purchasing an insurance policy for you and your families health needs, we hope this article helped you to know what is a TPA in the insurance industry and how they facilitate claims processing. In the wake of covid19 and the resultant increase in claims, it would have been impossible for the health insurers to manage the claim settlements without the help of the TPA. Also without the right information reaping the best benefits of your insurance policy might not be possible.
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