How Does TPA Help In Processing Medical Insurance Claims?

Our lifestyle dramatically impacts the number of health issues we currently deal with. With every passing day, the number of issues is increasing due to the food we consume, air and water pollution, global warming, sedentary lifestyle, and so on… 

Previously considered a privilege, health insurance is now a necessity. In addition, medical treatment costs have increased significantly, making a health insurance policy a must-have.

With the growing prevalence of diseases and health issues across the world, one needs to be well informed about the available options in the health insurance sector. Understanding the various aspects of the sector can help one make the right choice. One major facility the sector offers is the services provided by TPA.

Let’s try to understand TPA’s role in the health insurance sector in detail:

What is TPA?

TPA full form is Third Party Administrator and was introduced in the year 2001. As the name suggests, the third-party organization acts as an administrator for the services mentioned in the contract. The objective of appointing a TPA is to provide a cashless, easy, and hassle-free claim settlement process for both the insurer and insured party. 

Insurance companies opt for the appointment of a TPA for ease of access since the claim settlement process requires skilled staffing, which is costlier compared to appointing a TPA. This drives insurance companies to opt for appointing a TPA.

What is the role of a TPA?

The primary role of a TPA is to ease all the transactions between the Liability for Non-Owned Automobiles Insurance in Canadacompany and the insured. Their responsibility commences after an insurance policy is issued by the company. Here is the detailed list of roles and responsibilities undertaken by a TPA:

1) Claim Settlement: 

One of the most essential and complicated roles of a Third Party Administrator in health insurance is claim settlement. It involves submission of the bills by the hospital and detailed verification of the same with the policy terms and conditions. TPA may opt for a second opinion in case there is a concern on the claim logged or bills submitted.

2) Cashless processing:

TPA finalizes the list of hospitals identified as network hospitals. The insured person may opt for cashless processing if they receive treatment at an in-network hospital. The insured person needs to inform TPA about the bill amount and facilities availed; based on the same, the payment is done directly by TPA to the hospital.

3) Maintain Database:

Post issuance of the policy, all the information is sent to the TPA by the insurance company. Communications thereon are held between the TPA and the insured without the involvement of the insurance company. The third-party administrator is responsible for maintaining a database of all details about the insured, such as the policy document, unique ID creation, claim settled details, etc.

4) Process standardization:

A TPA insurance agent is an expert in the role of health insurance claim processing. All the processes such as claim inquiries, bill processing, and settlement are done with due diligence and standardized to enhance the quality of service to the insured.

5) Maintain service center: 

A Third-party administrator in insurance is responsible for maintaining a 24*7 customer service center that is accessible over a call to resolve queries such as claim eligibility, settlement process, claim status, and network of hospitals.

6) Value-added services:

In addition to the general services as detailed above, many value-added services such as ambulance services, bed availability, medicine supplies, and other health facilities are provided by TPA to ease the insurance process for the insured.

Benefits of TPA for policyholders:

Here are some benefits that a policyholder can derive from a good health TPA:

  • Assistance with the documentation required for claim settlement.
  • Cashless claim settlement process at network hospitals.
  • 24*7 customer support to address any queries.
  • Standardization and simplification of the claim settlement process.
  • Real-time support during hospitalization of the insured.
  • Lower rates of insurance premiums

Want to change/ cancel a TPA?

The role of TPA in health insurance is to reduce the turnaround time for claim processing and provide real-time assistance. If the insured believes that the above objectives are not met, one may opt for cancellation/ changing a TPA. The procedure for the same is detailed below:

  • Inform the insurance company regarding your need to change/ cancel a TPA.
  • Share the policy details and unique ID number.
  • Detail out the reason for cancellation/ changing the TPA.
  • You may get the necessary changes done upon approval from the insurance company.

Winding up…

As per IRDAI, TPA is engaged for a fee/ remuneration to provide services to the insurance company and the insured party.

With the growth of the insurance sector, the TPA’s role in health insurance is expected to increase in the future. The involvement of a TPA makes the claim settlement process, cashless settlement, and other requirements faster and more convenient for the insured person. TPA also helps increase the knowledge base related to health services, minimizing the insurance premium, thereby expanding the reach of the health insurance sector. Some policyholders still opt to call the insurance agent for all their queries leading to delays in time and chaos. One should therefore make effective utilization of the services provided by TPA to enjoy a hassle-free claim settlement process.

By hiring the right TPA, you can minimize the risk of claim denial and maximize the value of your insurance by making sure the claim is handled correctly and quickly. In order to stay protected and avoid costly surprises, you should make sure to choose the right TPA for your needs.

FAQs related to TPA:

1) Should I pay a commission to a TPA?

No, you are not required to pay any commission for a TPA. The insurance company appoints the TPA to serve your needs.

2) Can I select a TPA?

Yes.! You can change the TPA appointed by your insurance service provider based on your requirements.

3) Who are the experts included in a TPA?

TPA selects members who are experts from various fields, such as doctors, insurance consultants, legal experts, and IT professionals

About Ambika Taylor

Myself Ambika Taylor. I am admin of For any business query, you can contact me at [email protected]