C S C V L E T R A I N I N G

the

ROLE OF TPA’S IN

Health Insurance

NOTES

1.  Third  Party  Administrators  are  

intermediaries  providing  health  insurance  
services  on  behalf  of  Insurance  Companies.  Third  Party  
Administrators  operating  in  Health  insurance  sector  are  licensed  
by  IRDA  under  IRDA  (Third  Party  -­‐  Health  Services)  Regulations  
of  2001.  The  main  services  provided  by  TPA  are  processing  
claims  and  provides  cashless  facilities.  Third  Party  
Administrations  are  paid  fee  by  the  Insurance  company  which  
enters  into  agreement  with  them.  
 
1.1  The  liability  to  settle  the  claim  under  the  policy  of  health  
insurance  remains  with  the  insurers  and  it  cannot  be  transferred  
to  TPA.  Insurance  companies  engage,  TPA  to  improve  efficiency  
of  claim  settlement  process.  
 
A  few  insurers  have  their  own  separate  departments  to  process  
the  health  insurance  claims,  majority  of  the  insurers  utilize  
services  to  professional  TPAs.
TPA – HEALTH INSURANCE CSC-VLE TRAINING

2.  Services    provided  by  TPAs  

 

2.1  Cash  less  service  

 

In   cash   less   facility   TPAs   tie   up,   with   hospitals   where   the  
policyholder   can   get   treatment   without   payment   of   any  
deposit   or   hospital   charges,   these   hospitals   are   called  
network  hospitals.  Policyholder  gets  the  treatment  without  
incurring  any  money.      
 

2.1  Other  services  

 

2.1.1  To  Insurance  Companies:-­‐  

a) For   timely   settlement   of   claims   –   Collection   of   claims  
documents,   processing   and   claims   settlement   and  
payments.  
b) Reduction  in  claims  cost  by  their  expertise  in  the  field.  
c) Analyzing,  studying  and  advising  appropriate  authorities  
regarding  control  on  incidence  of  frauds.  
d) Maintenance   of   data   about   the   health   insurance   claims,  
which   can   be   used   by   insurance   companies   in   decision  
making.  
e) Advise   and   help   insurance   companies   in   developing  
insurance  schemes.    

2.1.2  To  Policyholder:-­‐    

a) Helping   and   guiding   the   policyholders   on   health   and  
insurance  matters.  
b) Help  policyholders  in  finding  out  suitable  doctors  and  
beds  in  hospitals.  
c) Liaison   with   hospitals   and   policyholders   for   better  
health  care  management.  
d) Arrange   for   quality   treatment   at   lesser   cost.   TPA  
issues   identity   cards   with   unique   identification  
numbers   to   policyholders   and   handles   all   issues  
related  to  their  claim  settlements.    
e) TPA   runs   a   24-­‐hour   toll-­‐free   number,   which   can   be  
accessed  from  anywhere  in  the  country.    

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 TPA – HEALTH INSURANCE CSC-VLE TRAINING

3.  Code  of  Conduct  for  TPAs       g) Don’t  try  to  shift  insurance  business  
The   following   code   of   conduct   has   been   from  one  insurer  to  another.  
prescribed  for  Third  Party  Administrator.     h) Don’t  try  to  sell  information  and  data  
a) Disclosure   of   license   when  
collected   during   course   of   the  
demanded   by   policyholder   and  
business.  
others  
i) Keep  data  and  information  collected  
b) Disclose   the   authority   granted   by  
during   course   of   servicing   as  
insurer.  
confidential.   Provide   information  
c) Bring  out  adverse  features  coming  to  
only   to   the   insurers   when   they  
notice  while  dealing  with  claims.  
require  for  decision  making.  
d) Collection   of   all   claim   documents  
j) Not   to   advertise   about   insurers  
from   the   policyholders   for   the   claim  
without  their  permission.  
process.  
k) Don’t  share  any  part  of  claim  amount  
e) Educate   policyholders   about  
with  the  Policyholder.  
compliance   of   insurance  
l) Follow   directives   of   IRDA   issued  
requirements,  as  and  when  needed.  
from  time  to  time.  
f) Act   in   courteous   and   professional  
manner.  

4.  Maintenance  of  records  

TPAs   maintain   all   records   and   documents   as   required   by   insurers   under   agreement   with   them.  
Submit  the  same  to  insurers  from  time  to  time  or  as  and  when  required.  
 

IRDA  also  may  approach  TPAs  for  the  sharing  or  checking  of  data  in  that  case.  TPAs  need  to  provide  
it  immediately.  

In  case  of  cancellation  or  revocation  of  license  by  IRDA,  all  the  data  with  them  needs  to  be  returned  
to  insurers,  who  are  owners  of  the  data.

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 TPA – HEALTH INSURANCE CSC-VLE TRAINING

5.  Claim  Process  

The  services  provided  by  TPA  to  facilitate  claim  

are  as  follows:    

a) The   TPA   keeps   and   maintains   all   the  

records   of   medical   insurance   policies   of  
an  insurer.  
b) ID   card:   TPA   provides   ID   cards,   at   the  
time   of   policy   issuance,   to   all   their  
policyholders   in   order   to   validate   their  
identity  at  the  time  of  admission.  
c) The   TPA's   undertakes   "Pre-­‐
authorization"   before   a   surgical   6.  Process  Flow  
procedure  to  ease  claim  processing    
d) 24   hours   customer   support   services:   The   TPA   issues   identity   cards   to   all   the  
The   TPA   provide   assistance   through   policyholders.   The   policyholders   will   have   to  
their   24   hrs   call   center   that   provides   show   the   identity   cards   to   the   hospital  
information   regarding   policyholder's   authorities   before   availing   any   services   from  
data,   provider   network,   claim   status,   the  hospital.    
benefits   available   with   existing  
cardholder,   etc.   All   these   details   are   a) In   case   of   a   claim,   policyholders  
furnished  on  request.   will  have   to   inform   the   TPA   on   a   24   hr  
e) Cashless   Hospitalization:   Each   toll-­‐  free  line  provided  by  them.    
policyholder   is   provided   with   a   list   of   b) After   informing   the   TPA,   the  
empanelled   hospitals   wherein   he/she   policyholder   will   be   directed   to   a  
can  avail  cashless  hospitalization.   hospital   where   the   TPA   has   a   tie-­‐up  
f) Claim   Management:   On   behalf   of   the   arrangement.   However,   policyholders  
insurance   companies   TPA   administers   have   the   option   to   be   admitted   at  
and   settles   claims   for   hospitals   and   another  hospital  of  their  choice  in  which  
policyholders. case,   payment   will   be   on  
reimbursement  basis.    
c) TPA   pays   for   the   treatment;   they   issue  
an   authorization   letter   to   the   hospital  
for  the  admission  of  the  policyholder  in  
the  hospital.  
d) At   the   point   of   discharge,   all   the   bills  
will   be   sent   to   the   TPA   while   they   are  
tracking   the   case   of   the   insured   at   the  
hospital.  
e) TPA  makes  the  payment  to  the  hospital.  
f) TPA  sends  all  the  documents  necessary  
for   consideration   of   claims,   along   with  
the  bills  to  the  insurance  company.  

The  insurance  company  then  reimburses  the  

TPA.