All you need to know about Third-Party Administrators

Policyholders know their insurance agents or brokers and their insurers too. But most have only a hazy idea about a distinct entity called Third Party Administrator or TPA.

Many health insurance providers offer cashless healthcare facility, wherein hospital bills are directly settled by the insurance provider to the network hospital where insured is availing treatment. This is where the concept of Third Party Administrator or (TPA) has originated from. Insurers depend on this entity for servicing a large volume of health policies more efficiently.

If you have a health policy, the odds are that you know that you have a TPA because they would be servicing your claims.

To know some essential facts about them do read on.....

What are TPAs?

In India, they are mainly associated with servicing health claims. TPAs are an important service intermediary and will be your main point-of-contact for claims. Nine out of ten health policies have a servicing TPA engaged for a fee by insurers. Their name and contact details would be available in your policy. Take a look at it and make a note of their contact details in your mobile phone. You may suddenly need it for a health contingency.

Are TPAs registered?

Yes. They are required to be registered by the Insurance industry regulator, IRDAI and are engaged by insurers for a fee to service their health policies. They cannot work without registration. Their registration certificates are issued by the Insurance Regulator, IRDAI and can even be cancelled for violations and/deviations in their work from their Code of Conduct, specified by IRDAI.

What are their functions?

Some important functions of TPAs include:

• Pre-acceptance health tests are sometimes organised by them, if required, by the insurers prior to issuing policies to new customers.

• They issue health cards to the policy holders. This serves as a photo identity card to the policyholders, necessary for hospitalization. It also has the policy number of the policyholder with its period of coverage.

• They run call centres which are manned 24 hours, seven days a week, round the clock for enquiries and providing information for hospitalization and claims assistance. You have to log in your call to the call-centre for approval or pre-authorization of your cashless hospitalization.

• They co-ordinate and manage the cashless facility for insured customers. Cashless facility refers to claiming the benefits of health insurance by availing services at the TPA's empanelled network hospital. That means TPA will process the claim and the settlement of claim will be directly made to the hospital without the insured having to spend out of his pocket for his/her hospitalization.

• They maintain an up-to-date list of hospitals (also called Network Providers) empanelled for cashless hospitalization on their website. This list is also modified from time to time.

• They also co-ordinate with hospitals regarding your treatment and release the funds at the conclusion of your treatment so that you are issued your discharge certificate and can go home after treatment.

• They take your pre and post hospitalization documents and release the funds for these claims after obtaining approval from the insurer.

• They also process your reimbursement against hospitalization claims and send them for approval to the insurers.

• They also assist in wellness features of the policy, if any.

• They also service claims for hospitalization cover, if any, under Personal Accident Policies, domestic travel policies and foreign travel policies issued by Indian insurers covering medical treatment or hospitalization outside India.

• TPAs may also render such other Health Services to be offered under health non-insurance health care schemes promoted, sponsored or approved by Central or State Government.

Why are they important?

Their importance lies in the fact that they are your main point of contact for health claims. From pre-authorisation of your cashless claims to approving your discharge they maintain contact with the hospital where you have been admitted. They also process your pre and post hospitalisation and reimbursement claims.

What are the parameters TPAs check in claims?

The TPA essentially checks that:

• That the hospitalization is prescribed by a registered medical practitioner.

• It must follow standard treatment protocols

• There must be an active line of treatment which can only be carried out in a hospital

• The claim documentation must be complete. It should include a completed claim form, original bills, diagnostic reports, doctor's prescriptions, discharge summary etc.

• That the claim does not fall within a specified waiting period.

• There are no non-disclosures (which are revealed by discrepancies) which can make the claim non-payable.

• The claims conform to the timelines specified in the policy

What are their responsibilities regarding claims?

• They are required to inform the customer about their claim settlement. They also communicate the detailed components of the payments made, amounts disallowed and the reasons thereof, to the customer.

• The TPA on its own cannot reject or repudiate the claim. The decision with respect to rejection or repudiation of the claim can be sent only by the concerned insurer to the customer.

• They must also have effective grievance management systems in place and resolve the grievances of policyholders within fifteen days of receipt of the same.

Names of some major TPAs

Heritage, Family Health Plan, Medicare, E-Meditek, Genins India, Paramount and Mediassist are some TPAs that you may have come across.

How does one find out about them?

You should focus on finding out information relevant to your servicing TPA. Ascertain their email ID from your health policy and go to their website. Find out about their toll-free number and procedure and timelines for intimating about claims from your policy document. Make a test call and find out how things work. Check the list of hospitals empanelled by them for cashless hospitalization and verify a multi-speciality hospital accessible to your house. (You could request admission there, when required.) Check this list of empanelled hospitals from time to time, as there may be modifications. New hospitals may be empanelled whilst some others may be removed from their list. Don't worry. You can still be admitted in these hospitals, even if removed from the empanelled list, but then your claims will be paid on reimbursement basis.

Who pays for the services of a TPA?

The insurer appoints one or more TPAs from the list of TPAs registered by the Regulator, IRDAI to service their health portfolio.

They execute a Service Level Agreement and pay a specified service charge to the TPA. Thus, TPA's major revenue comes in the form of fees or commission on premium, which is standardized by the IRDA.

Can I select my TPA?

The customer has the option of selecting a TPA from the list of TPAs selected by the Insurer. However, if the Insurer selects only a single TPA to service their entire health portfolio, then the customer cannot exercise any preference here. His health policy will be serviced by the empanelled TPA of the insurer.

If I am dissatisfied with their services, what can I do?

You could complain to your insurer under their formal grievance redressal mechanism. You can also change your TPA at the time of renewal, in case there are other TPAs on the panel of the insurer. You can also complain to the Insurance Ombudsman.

Can I opt for a health policy without a TPA?

Yes, that is possible.

Sometimes the insurer gives 2 tariffs for their health policies. Where the policies are to be serviced by a TPA the premium is approximately 6 % higher than the policies not serviced by a TPA.

But, if the policies are not serviced by a TPA, then the cashless facility is also unavailable. So, the customer loses out on this point and can only avail of claims on reimbursement basis.

Are there insurers who do not use TPAs?

Yes, there are insurers who only use their own in-house TPA for better management of claims. Star Health Insurance, is one such Health Insurance provider, who uses their own in-house TPA.

So find out about your servicing TPAs contact details and get in touch with them, when necessary, without a hitch.

The writer is former manager, National Insurance Company Ltd.