THIRD PARTY

ADMINISTRATOR (TPA)
INTRODUCTION:
 TPA is third party administrator which connects the insurer & the
insured.

 Their basic role is to function as an intermediary between the insurer and

the insured. The core service of a TPA is to ensure better services to
policyholders

 TPAs concept were introduced by the IRDA in the year 2001.

 The concept of TPA was been introduced by IRDA for the benefit of both
the insured and the insurer. While the insured is benefited by quicker &
better service, insurers are benefited by reduction in their administrative
costs, fraudulent claims and ultimately bringing down the claim ratios
DEFINITION:

A Third Party Administrator (TPA) is an

organization that processes insurance claims or
certain aspects of employee benefit plans for a
separate entity . This can be viewed as "
outsourcing" the administration of the claims
processing
 ROLE IN HEALTH CARE

 Third party administrators are prominent players in the managed

care industry and have the expertise and capability to administer

all or a portion of the claims process.

 They are normally contracted by a health insurer or self-insuring

companies to administer services, including claims

administration, premium collection, no enrollment and other
administrative activities.
CONTT…..

 A hospital or provider organization desiring to set up its own

health plan will often outsource certain responsibilities to a TPA.

 For example, an employer may choose to help finance the health

care costs of its employees by contracting with a TPA to administer

many aspects of a self-funded health care plan
 PROVIDERS
PROVIDERS Policy
TPA Holders
• Desiring less
administrative
administrative Demanding

burden, greater better service,

autonomy, faster more
more information,
information,
payments, and and greater
greater incomes convenience
Insurance
Insurance Co
Co

Striving
Striving to
to reduce
reduce premiums.
premiums.
• Make better policies.
•• Aim at Claims Control
TERMINOLOGIES:

 Health Services- Means all the services to be rendered by a TPA under an

agreement with an insurance company in connection with health
insurance.

 Policy - Policy is a contract between two parties whereby one party called
insurer undertakes in exchange for a fixed sum called premiums, to pay
the other party called insured a fixed amount of money on the happening
of a certain event.

 Group Health Insurance- Coverage through an employer or other entity

that covers all individuals in the group.

 Dependents - Spouse and/or unmarried children (whether natural,

adopted or step) with the parents of an insured depending upon the
contract with the insurance company.
CONTD..
 Co-payment-The portion of a bill that the insured has to pay, usually at the
time of service availed.

 Sum insured- The amount an insurance policy pays out. Means the
maximum limit up to which insurance company is liable to pay in a year.

 Network Service Providers -A group hospitals and Nursing Homes

contracted by the TPA to provide services to insured, where he does not
pay any amount for getting treatment.
CONTD..
 Past Policy -Any previous policies, in whose continuation the present
policy is, without any break.

 Break in Policy -Any gap in renewal of policy.

 Lapse -The termination or discontinuance of a policy, usually resulting

from the insured's failure to pay the premium due.

 Claim-Request for payment under the terms of the policy. May be

submitted by the Insured or the Network Service Provider

 Cashless Claims -Claim, in which the insured gets treatment in a

Network Service Provider Hospital & does not pay the bills. Then those
bills are claimed by that Network Service Provider Hospital.
CONTD..
 Reimbursement Claim -Claim, in which the insured gets treatment in a
Hospital of his choice & pays the bill. Then claimant claims those bills from
TPA.

 Domiciliary hospitalization -Treatment provided to the insured at home

by the doctor, in case, either the condition of the patient’s is too poor to be
taken to are not available in near by vicinity. the hospital or the proper medical
facilities

 Day Care -Treatment of certain medical conditions for which 24 hours

hospitalization is not required.
 CONTD..
 Pre & Post Claim -Expenses incurred with in 30 to 60 days before & 60 to
90 days after the cashless hospitalization depending up on Insurance
Companies, in relation with that cashless hospitalization
The expenses should be relevant to the diagnosis.

 PAC- Certificate authorizing hospital to treat the insured up to a

predetermined amount, when TPA receives the request first time from the
hospital.

 Extension / Additional PAC -Certificate authorizing hospital to treat the

insured up to a predetermined amount, when TPA receives the Final bills
from the hospital & Insured is ready to be discharged from the hospital .
CONTD..
 Query/Discrepancy -The process of asking insured / hospital some
document / information when there is requirements of certain
documents / information, necessary to process the claim.

 Denial -Refusal by the TPA to honor a request by an individual or the

network service provider to pay for health care services obtained from a
health care professional.

 64 VB -Confirmation about the deposition of premium amount in

Insurance Company’s account.
CONTD…
 Approval -When the competent approving authority permitted the claim
to be pay.

 Repudiation- Repudiation means claim is not payable at any cost because

it is against policy terms & condition & cannot be reopened after any reply
until & unless we get the approval from the insurance company

 Float -The amount provided by the insurance company to the TPA, to

settle the claims.

 MIS -The report regarding the average time taken to process the cashless
& reimbursement claims & dispatch of cheque is to be submitted to IRDA
& Insurance companies on monthly basis.
SCOPE OF TPA SERVICES:

CUTOMER SERVICE-

 24 Hour ‘May I Help You’ Cell

 Cashless Access in Network Hospital

 Customer Grievance Cell

 Customer Satisfaction Survey

 Action Taken Report

 Call Center Analysis

 Customer Education At Their Site

CALL CENTRE SERVICE:

 24 x 7 IVR Enabled Call Centre Services

( I V R Enabled with language option for English, Hindi, and
other regional languages )

 Call Centre Supported by exclusive Software Module

 Professionally skilled Manpower managed by Doctors

 Providing information in following areas :

- Claim Status
- Member or Employee Details on Coverage and Eligibility
- Guidance in case of Emergency
- Providing details on Network Hospitals
- Information on claim Process and Management
- Support and Information from Medical Advisors
MEMBER ENROLMENT:

 Policy Documentation

 ID Card Generation

 Member Guide or Handbook – Printing

 Policy Administration Guide or Handbook printing

 Dispatch

 Renewal Intimation

 Data Analysis and Reporting As Required

 Enrolment of Clients

ID card Issue
• INSURANCE
• COMPANY ISSUES POLICY

• ID CARD PRINTED AND

• DISPATCHED TO POLICY • INSURANCE COMPANY
• HOLDER ALONG WITH • SENDS
• GUIDE BOOK. • DIRECT LOGIN BY CORPORATE • DATA TO TPA
• EMPLOYEES

• DATA VALIDATION • CONTENTS OF POLICY • PHOTOGRAPHS SCANNED

• PROCESS • TRANSFERRED TO TPA • AND UPLOADED
• DATA BASE. • BY TPA

• 7 Working
• days

• Physical Cards (Photo/Non-Photo) • E-Cards

MEDICAL MANAGEMENT:

 Pre Authorization/ Authority Letter

 Survey Vs Customers And Reasonable Charge

 Telephone Medical Guidance

 Case Management When Required

 Medical Data Analysis And Reporting As Asked

 Medical Visits Providers For Vigilance

CLAIM MANAGEMENT:

 Collection of Claims Document

 Claim Security

 Claim Processing

 Payment at claims

 Reporting of Turnaround Time For Claims

 Reporting of Claim Management To Insure As Required

 Claims Float Management

 Claim Statement
• REIMBURSEMENT HOSPITALIZATION SERVICES
INSURED GETS HOSPITALIZED
IN NON-NETWORK HOSPITAL
CLAIM PAPERS SENT TO TPA
• Advantages:
• -Regulated Payouts in form of medical
expenses
• -Access to Top Quality Service
Providers( Hospitals)
• -No Arrangement of Funds required for
hospitalization

If Documents Are Insufficient Immediately

CLAIM IS PROCESSED
Intimated To Employee

CLAIM PASSED / REJECTED

MAXIMUM TURN AROUND TIME

SUBJECT TO AVAILABILITY OF ALL NECESSARY
DOCUMENTS WILL BE SEVEN WORKING DAYS
 EMPANELMENT OF HOSPITALS

• REQUEST FROM HOSPITAL

• FOR EMPANELMENT
• COLLECT INFORMATION
• VISIT TO HOSPITAL
• ON HOSPITAL

• IDENTIFICATION OF HOSPITAL
• BY TPA
• EMPANELMENT TEAM

• CYCLE TIME
• 15 DAYS.
• VALIDATION AGAINST
• STANDARD
• RECEIPT OF MOU
• TEMPLATE & GRADING
• AND UPDATION OF
• DATABASE

• NEGOTIATION
• ON RATES

• Random Audit Visits post

empanelment
 Pre-authorization
Process for Cashless

MEMBER
APPROACHES HOSPITAL SENDS
WITH INTIMATION TO TPA
HOSPITALS
EMP. ID

ELIGIBILITY OUT OF POCKET

PAYMENT
Not
Covered

Covered

CASHLESS
AUTHORIZATION AS TREATMENT
PER ELIGIBILITY
Protocol for Availing Treatment in Non Network
Hospital
MEMBER AVAILS TREATMENT AT ANY HOSPITAL AND
MAKES UPFRONT PAYMENT

MEMBER SUBMITS BILLS TO

TPA HELP DESK ALONG WITH ECS REQUEST

TPA REPRESENTATIVE VERIFIES THE DOCUMENTS

SUBMITTED

IN CASE OF INCOMPLETE
DOCUMENTS RECOVERY OF TPA PROCESSES CLAIMS
DOCUMENTS FOR SCRUTINY
SETTLE THE CLAIM
LEGAL ASPECTS OF TPA:

CONDITIONS OF AND PROCEDURE FOR LICENSING OF TPA

 Only a company with a share capital and registered under the Companies

Act, 1956 can function as a TPA.

 The main or primary object of the company shall be to carry on business

in India as a TPA in the health services, and on being licensed by the
Authority, the company shall not engage itself in any other business.
CONTD..

 The minimum paid up capital of the company shall be in equity shares

amounting to Rs. 1 crore (Rupees One crore only).

 At no point of time of its functioning the TPA shall have a working capital

of less than Rs. 1 crore.

 At least one of the directors of the TPA shall be a qualified medical doctor

registered with the Medical Council of India.

CONTD..
 The aggregate holdings of equity shares by a foreign company shall not at

any time exceed twenty-six percent of the paid up equity capital of a third
party administrator

 Any transfer of shares exceeding 5% of the paid up share capital shall be

intimated by the TPA to the Authority within 15 days of the transfer

indicating the names and particulars of the transferor and transferee.
PROBLEMS FROM TPAs:

 Lack of Infrastructure

 “There are no holidays in Health care” yet

offices not open on holidays, telephone access unavailable, etc

 No qualified doctor / staff

 Delay in settlement

 Deduction in bills without basis

 Increased paperwork
CONCLUSION:

Third party administrators are prominent

players in the managed care industry and have
the expertise and capability to administer all or
a portion of the claims process.
TPA Gives you
something
priceless-

Peace of mind