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THIRD PARTY ADMINISTRATORS
With the growth of private voluntary insurance in the unregulated healthcare market, costs of healthcare are likely to go up. Managed care organizations in many developed countries play an important role in containing costs. In India, The Insurance Regulatory and Development Authority (IRDA) has paved the way for insurance intermediaries such as third party administrators (TPAs), who are expected to play a pivotal role in setting up managed care systems. TPAs have been set up to ensure better services to policyholders and to mitigate some of the negative consequences of private health insurance.
TPA (Health Insurance) is a service provider aiming at the provision of cost efficient and effective administrative services (Policyholder Assistance, Cashless Provider Network Access and Claims adjudication) on behalf of an Insurer to the Policyholder
Health Insurance is defined as Insurance against financial losses resulting from sickness or accidental bodily injury. Protection that provides payment of benefits for covered sickness or injury. Included under this heading are various types of insurance such as accident insurance, disability income insurance, medical expense insurance, and accidental death and dismemberment insurance.
A TPA is a person or organization that processes claims and may perform other administrative services in accordance with a service contract. A firm, which provides administrative services for employers and other associations having group insurance policies. The TPA in addition to being the liaison between the employer and the insurer is also involved with certifying eligibility, preparing reports required by the state and processing claims. TPA's are being used more and more with the increase in employer self-funded plans. Third Party Administrators (TPAs) are in the business of processing medical claims.
TPAs - Filling The Need Gap
| Access |
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Channelising policyholders to the qualified provider for appropriate care. Cashless access - Facilitating policyholders to network providers. |
| Quality |
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Proper diagnosis and effective treatment. |
| Cost |
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Negotiated rates with providers, often discounted. |
TPA Services
| Benefit Management |
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Help in designing customised health plans both for Groups/Corporate and Insurers |
| Medical Management |
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Pre-admission testing, Pre-authorisation, Treatment follow-up, disease management |
| Provider Network Management |
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Contracting with providers in terms of discounts, quality, cashless facility, utilization review (very preliminary) |
| Claims Adjudication |
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Documentation, eligibility, coverage, settlement process |
| Information and Data Management |
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Regular reporting to Insurers. Data analysis for product innovation and pricing. |
TPAs organize healthcare providers by establishing networks with hospitals, general practitioners, diagnostic centers, pharmacies, dental clinics, physiotherapy clinics, etc.They sign a memorandum of understanding with insurance companies according to Which they inform policyholders about the network of healthcare delivery facilities and various systems and processes for settling claims. Policyholders are enrolled and registered with TPAs to avail of these services and in the event of hospitalization, health facilities are expected to inform the TPAs. The medical referee of TPA examines the admissibility of the case and accordingly informs the healthcare facility to proceed with the treatment. The agreement between TPAs and healthcare facilities provides for monitoring and collection of documents and bills pertaining to the treatment. Documents are audited and after processing sent to the insurance company for reimbursement. TPAs have the responsibility of managing claims and getting reimbursements from the insurance company and paying the healthcare provider.
Ex servicemen are required to indicate in writing at the time of admission the additional facilities they would like to avail. Necessary payments for these including food charges will have to be paid in cash, on admission, in advance.
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