Role and Importance of TPA in Health Insurance Policy

The increasing number of health related issues due to our current lifestyles and the environmental conditions has shifted the perception of health insurance from a luxury segment to the necessity segment. Now people are more aware of the benefits of the health insurance. A health insurance policy also helps in tackling the rising cost of health care which can burn a deep hole in your pocket.

What is TPA in health insurance policy and what’s it’s role?

TPA or the Third Party Administrator has a role that starts after the policy has been issued. The following are some of the important roles of TPA in health insurance.

1.    Claim Settlement: One of the most important roles of TPA is claim settlement of health insurance policy. The bills of the hospitals which need to be claimed is shared with TPA by the hospital and the TPA cross checks the same according to the terms and conditions of the policy. The TPA can take a second medical opinion for complicated cases and can also investigate hospital records in case of suspicious claims.

2.    Cashless Processing: In case of treatment in network hospitals, a TPA helps in cashless processing under a health insurance policy. The insured person has to inform the health insurance TPA about the details of the treatment and facilities availed with the proof of the required documents, which is then verified by the TPA and then all the bills of hospitals which comes under the policy cover is paid directly by the company.

3.    Maintaining database: Health Insurance TPA also helps in maintaining the database record. After the issuance of the policy, all the policy documents are transferred to TPA and all the further communication of the policy holder is with the TPA, not with the insurance company. The TPA maintains the policy documents of the policy holder and issues an identity card with unique identification numbers.

4.    Maintaining service centre: Health Insurance TPA is also responsible for maintaining a 24 hour customer service centre, which can be accessed from anywhere in the country and can be used for queries and information such as eligibility for the claim, claim settlement process, status of claim settlement, network of hospitals etc.

5.    Value-Added Services: Apart of the above mentioned roles, a TPA in insurance also helps in value added services such as ambulance services, availability of beds, lifestyle management, medicine supplies, health facilities etc.

 Importance of TPA:

1.    Better delivery of services: The involvement of TPA helps in improving the services of health insurance policy.

2.    Better standardization: Due to the specialized skill set and technology, the TPA is able to make better standardization of all the processes that they carry out with due diligence.

3.    Greater penetration of health insurance: The involvement of TPA has also allowed a greater penetration of health insurance and this is because of the better services provided by the TPA which makes managing and understanding of the health insurance policy very easy.

4.    Lower insurance premium: The TPA includes a team of professionals who help the claim process which helps in avoiding fake claims and restricts unnecessary treatments, thus improving quality of service which leads to low insurance premiums.

Other than the above-mentioned importance, TPA in insurance also helps in increasing the knowledge base of healthcare services and minimizes expenditure of the insurer.