Why the Third-Party Administrator is the Deciding Factor for Health Insurance?

Third-Party Administrators, widely known as TPAs, play a vital role in the health insurance arena of India. A TPA acts as an intermediary between the insurer and the insured, guaranteeing better services to the former. Apart from this, TPAs have a broad role in standardizing charges and managing cashless health insurance plans. 

Policyholders have the liberty to select the TPA of their choice from the insurer’s list of engaged TPAs. If the insured is not fully satisfied with the service of a particular TPA, they have the option to change it at the time of renewal. Additionally, if the insurer ceases the services of a TPA, then the insured can select another one from the list. Many private insurance players have decided to go for in-house claim processing to improve the efficiency in processing and settling claims. Bajaj Allianz Health Insurance is the first one in the country to create an in-house health administration team. Today, the cashless response time of Bajaj Allianz is less than 60 minutes.

A Third-Party Administrator can either be a company, an agency, or an organization with the license of IRDAI (Insurance Regulatory and Development Authority of India). In India, TPA was introduced through the notification of TPA-Health Services Regulations, 2001 by IRDAI to facilitate cashless services. 

Role of a Third-Party Administrator

The role of a TPA is as given below:

  • After the issuance of the policy, all documents are transferred to the TPA. And all future communication will be carried out between the TPA and the insured.
  • The TPA affects identification cards to all policyholders.
  • The Third-Party Administrator must maintain a customer service centre. Through this 24-hour helpline service, they answer the queries of the policyholders and give information related to various insurance plans, such as impanelled hospitals, eligibility for a claim, claim settlement process, etc. 
  • Policyholders of a health insurance plan can intimate the TPA about the claim through their toll-free number.
  • On receiving the claim intimation, the third part administrator directs the patient to an impanelled hospital. However, the patient has the choice to select a hospital of their choice; the cashless facility will be available only at the empanelled hospitals. 
  • The TPA issues an authorisation letter to the hospital. It’s exclusively for cashless treatment facilities.
  • The TPA then tracks the case of the insured at the hospital and streamlines the claiming process. 
  • On discharge of the patients, the TPA collects all the bills and reimburses them. TPA collects all the bills and reimburses them.
  • The TPA then sends all documents related to the claim and bills to the health insurance company.
  • Later, the insurer reimburses the bills to the TPA.
  • The TPA will also get a commission for their services. In India, usually, the commission is about 6% of the claim amount. 
  • Apart from these, a Third-Party Administrator provides add-on services to the policyholders. These services include: 
    • Arrangement of ambulance 
    • Medicine and supplies
    • Guidance for specialised consultations
    • Give information about health facilities.
    • The organisation of lifestyle management and well-being programmes
    • 24-hour helpline services

Advantages of Third-Party Administrators

  • Streamline the claiming process 

Third-Party Administrators verify whether the claims satisfy the underlying terms and conditions of the respective plan or not. TPAs also check if the claim is within the framework of the guidelines issued by the insurer for the settlement of claims.

  • Reduces fake claims and restricts unnecessary treatments 

Usually, TPAs have a team of qualified doctors, legal experts, hospital managers, insurance consultants, IT professionals, etc. It helps TPAs to standardise the process and manage claims effectively. It also decreases the confusion of the customers about health insurance plans. A standardised process aids to reduce fake claims and restricts unnecessary treatments.

  • Reduces claim ratio

Standardised processes and reduced false claims allow insurers to drag down the claim ratio, which in turn reduces their expenses.

  • Greater awareness about health insurance plans

As a result of the improved services provided by Third-Party Administrators, the populace is getting more aware of the advantages of health insurance plans. It helps to mitigate the myths about health insurance plans.

  • Transparency

TPAs keep a high level of transparency in the insurance claiming process. Typically, TPAs are highly attentive in providing services; they process and settle claims in a shorter period and promptly answer customers’ queries. 

  • Helps insurance companies to maintain brand reputation 

TPAs are run by qualified professionals who guarantee quality services. It aims to avoid malpractices that were once prevalent in the health insurance industry. 

Takeaway

As a policyholder, you must select a TPA. Hence, choosing the right TPA is as vital as selecting the right health insurance plans. If you find it challenging to choose a reliable TPA, pick the insurance plan of an insurer like Bajaj Allianz Health Insurance, which handles the claims in-house. You can easily apply for Third-Party Administrator is the Health Insurance without any hassle.

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