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TPAs: The How's, Why's and Where's

Third Party Administrators are the backbone of the insurance industry in India. This article will give you a general idea on their system's workings.

What is the role of the TPA?
The role of the TPA is to do whatever the insurance company wishes it could do, but can’t because of lack of infrastructure!

The TPA takes under its wing a database of policy holders and then handles all their policy related issues, including cashless claim settlements, providing a 24-hour helpline to policy holders, a list of hospitals where a patient can get treatment with insurance benefits, information about health issues, specialized consultation information - the list goes on and on.

How does the TPA system work?
A well-organized TPA network can prove to be a boon when stresses are at their peak. A TPA relieves you of a lot of running around, by handling the financial aspects of your treatment directly with the hospital – almost like a benevolent father paying the bills while the kids play. Well – almost.

Here’s how it works
  • After you buy a health insurance policy from an insurance company, all your insurance records are transferred to an authorised TPA.
  • The company names a TPA in the policy. You contact the TPA and give the policy number and name of the insurer as a reference.
  • The insurance papers are normally transferred from the insurance company to the TPA in three days.
  • The TPA issues you a unique identity card, to be used at the time of hospitalization. This eases the identification procedures, since hospitals accept the identity card issued by a TPA as valid proof of identity.
  • The TPA is paid directly by the insurance company for the services it provides. No TPA is allowed to charge any amount from the insured party.
  • You continue to pay your yearly premium, against the possibility of needing the emergency fund someday.
  • When you finally need to use the insurance amount, you call up the TPA’s 24 hour toll free number and tell them about your upcoming hospitalization.
  • The TPA gives you a list of hospitals with which a tie-up is possible. You make your choice and get yourself admitted. You also show your identity card to the hospital authorities, so that they know which TPA is going to service your hospital charges.
  • The TPA issues a letter of authorization to the hospital, so that your treatment can continue without your being bothered by bills. All expenses are directly referred to the TPA
  • The TPA has, on its panel, a group of doctors, who constantly track the progress of your treatment, and also ensure that the treatment is covered under your insurance policy.
  • Once the treatment is over, the TPA settles the medical bill directly with the hospital, leaving you free to recover without settling hospital bills – a cashless transaction!
  • The TPA then refers the bill and documentation to the insurance company, which then reimburses to the TPA the entire amount paid.
Value addition is now just a telephone call away! The TPA network is at your beck and call, 24x365! If for some reason, your claim gets rejected by the TPA and the insurance company, you can take the matter further to what is called an Ombudsman. It is an effective system of redressal for insurance claims formulated by our government. You can learn more about it in our article on Ombudsmen.

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