A common term found in all the health insurance policies in India is TPA'
. Adding to the confusion is the explanation found "TPA means any company who has obtained license from IRDA to Practice as Third party administrator and is appointed by the company."
In lay man's term TPA is like a BPO; a common link between Insurance Company and the Customer. Insurance companies find the processing of claims to be a repetitive and standardized activity and use TPAs to outsource some of their administrative burden for a cost.
Cashless Service: Cashless Service is one of the important functions of the TPAs today which means that if you are hospitalized in a hospital among the ones listed by the insurance company, the bill is paid directly by the Insurance Company and you don't have to shell out anything. But, policyholders find it difficult to avail the cashless Service in a network hospital because there is very less awareness regarding TPAs. Policyholders mostly rely on their insurance agents who don't inform them about it.
Claim Settlement: TPAs are the ones concerned with dealing with Claims- complete from taking intimations of claims, advising customers on network hospitals, approving cashless and reimbursement claims, to finally disbursing the claims to the customer.
Maintaining Database: Once the policy has been issued, all the records are passed on to the TPAs and all further communication of the Policyholders is with the TPAs and not with the insurance companies. It is the responsibility of the Third Party Administrator to maintain databases of policyholders and issue them identity cards with unique identification numbers. Policyholders have to make sure that they receive the identity cards from the TPA within 30 days and have it ready in case of any emergency.
It is essential that you know your TPA name and contact number since it is the TPA that the Policyholders are supposed to contact in the case of hospitalization or claim settlement.