What is the Full Form of TPA?
The full form of TPA is Third Party Administrator. A TPA is an IRDA registered and licensed intermediary which acts as a mediator between the health Insurance company & the insured. The primary role of a TPA is to process health insurance claims, provide health insurance E-cards, and establish tie-ups with hospital networks enabling patients to avail cashless claim settlement.
Group Health Insurance Providers can outsource claims processing to External TPAs or process claims by having an In-house TPA team.
Third Party Administrators or TPAs act as Intermediaries between the Group Health Insurance Company and Policyholder and are responsible for providing services such as Claims Processing, Issuance of Mediclaim cards, Tie-Ups with Hospital to enable cashless claims settlement for Policyholders as well as processing Reimbursement Claims.
What is the Role of TPA in Group Health Insurance Policy?
A Third-Party Administrator in a Group Health Insurance Policy is responsible for the following functions:
Smooth Claim Processing and Settlement
The primary function of a Group Health Insurance TPA or Third-Party Administrator is to process and settle the claims raised under the Group Medical Insurance Policy. Third-Party Administrators are also responsible for verifying all the documents submitted for the Claim Processing and may request any additional information if necessary.
In the case of Cashless Claim Settlement, the hospital will provide the documents to the TPA while in case of reimbursement claim settlement, the employee must submit all the documents for claim processing to the TPA.
Issuing Health Cards to the Insured Employee
A TPA carries out an authorization process for all the insured employees covered under a Group Health Insurance Policy and then issues a health card to each employee. The Health Card contains the Policy Number and also mentions the TPA responsible for processing the claim. The health card is the most important document, and the insured must produce the health card at a Network Hospital to avail Cashless Claim Settlement.
Co-ordinate with the Insurance Company and the Insured
Another important function of a Third-Party Administrator is to co-ordinate with the Insured Employee as well as the Group Health Insurance Provider. As discussed above, the TPA is responsible for claims processing, both cashless and reimbursement, issue authorisation letter to the Hospital to process the claim amount for claim tracking purposes. After the claim is processed, the hospital sends the documents to the Group Health Insurance Company. Thus, a TPA is an important link between the Insured Employee, the Group Health Insurance Provider and the Hospital.
Build a Strong Network of Hospitals
The advantage of using an External TPA over an in-house processing team is that they provide a greater network of hospitals from which the policyholder can avail Cashless Claim Settlements. If the Insured Employee avails treatment at a Network Hospital, then Cashless Claim Settlement is provided to the employee which is much less cumbersome than the Reimbursement Claim Settlement Process.
In addition, the TPA also provides value-added services like ambulance services and wellness programs, which provide a better healthcare experience to the policyholders.
How does TPA help a Group Health Insurance Policyholder in Claim Settlement?
TPAs play an essential role in the settlement of Group Health Insurance Claims. The TPA is selected by the Group Health Insurer, who then issues the cards to the policyholders of the Group Health Insurance. The policyholder’s claims can be settled in 2 ways:
Cashless Claims Settlement
Once an employee raises a Group Health Insurance Claim with the TPA or the Group Health Insurance Provider, he is informed about the Network Hospitals where he can avail the treatment. If he selects one of the Network Hospitals for treatment, then the employee becomes eligible to avail cashless claim settlement at the network hospital.
In this scenario, the required documents are submitted by the hospital to the TPA, and the TPA processes the claim in co-ordination with the Group Health Insurance Company.
Reimbursement Claims Settlement
In some cases, the Insured Employee might want to avail treatment at a non-network hospital. In such a case, the employee needs to submit all the relevant documents and bills to the TPA after the treatment. The TPA is responsible for verifying the documents and processing the claim on reimbursement basis.
How to Change TPA in Group Health Insurance Policy?
As per IRDAI, the employer has the option to select his preferred TPA from the list of available TPAs that the Group Health Insurance Company provides. This gives the Insured more flexibility and offers the best experience to him. However, if the employer wishes to change the TPA in a Group Health Insurance Policy, it can be done at the time of renewing the Group Health Insurance Policy.
What is the importance of TPAs in Group Health Insurance?
As mentioned above, Third Party Administrators or TPAs play an extremely important role in Group Health Insurance Claims Settlement for the Insured Employee. In addition to claims settlement, Third Party Administrators also offer other services such as providing Group Health ID Cards and providing guidance to employees with regards to correct documentation to provide for claims settlement.
With respect to the Group Health Insurance Provider, the TPAs offer a single point of contact for claim settlement which simplifies the process considerably. Otherwise, the Group Health Insurance Company would need to co-ordinate with each hospital separately for claims settlement.
List of Third-Party Administrators (TPAs) in India
The list of Third-Party Administrators (TPAs) in India are listed below.
- Paramount Health Services and Insurance TPA Pvt Ltd
- Medi Assist TPA
- Family Health Plan Insurance TPA Ltd
- Raksha Health Insurance TPA Pvt Ltd
- Vidal Health Insurance TPA Services
- Genins India Insurance TPA Ltd
- Heritage Health Insurance TPA Pvt Ltd
- Safeway Insurance TPA Private Ltd
Note that not all the Group Health Insurance Companies work with external TPAs listed above. Some Group Health Insurance Providers like ICICI Lombard General Insurance Company, Bajaj Allianz General Insurance Company, HDFC Ergo General Insurance Company have their Inhouse TPA team.
In-House Claim Settlement vs External TPA – Which is better?
An In-House Claim Settlement Team is usually set up within the Insurance Company itself and performs similar functions as an external TPA. Such as processing claims, issuing cards and providing other services.
An In-House Claims Settlement Team has certain advantages over TPAs. The biggest advantage is that claim settlement is usually faster with a quick turnaround time since the complete process occurs within the Group Health Insurance Company itself while a TPA would have to co-ordinate with the Insurance Company which slows the process somewhat.
However, in cases where many claims need to be processed, it is highly efficient to hand over these activities to a Third-Party Administrator. (TPA)
Insurance companies like ICICI Lombard General Insurance, Bajaj Allianz General Insurance, HDFC Ergo General Insurance and Aditya Birla Insurance have an In-House Claims Settlement Team while other Group Health Insurance Providers outsource their claims handling to External TPAs so that they can offer better quality services to their policyholders.
Hence, both In-House Claim Settlement and External TPAs can provide effective processes for Group Health Insurance Claim Settlement. So, while you can consider the above factors for choosing a Group Health Insurance Policy, you should consider other features of a Group Health Insurance Policy such as Room Rent Limit, Pre-Existing Disease Coverage, Waiting Period of your Group Health Insurance Policy before finalising a Policy.
Qian Insurance Broking is a licensed Group Health Insurance Policy Broker. We have tie-ups with Top Group Health Insurance Companies in India and our team will assist you with the best Group health Insurance Policy Quotes and also help the employees with the entire claims process.
There are multiple Group Health Insurance Policies for Small Business which require as few as 7 employees. So, even small businesses should consider a Group Health Insurance Policy for employees as the premiums are very affordable.
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