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 Defining the Role of a Third-Party Administrator (TPA) in Health Insurance

Health emergencies are highly unpredictable and can come up at any time. What is more challenging is to find out the finances in that rush and panic. Preparing yourself for these financial situations is the most vital practice one needs to follow. We all felt its significance during the phase of COVID-19.

Buying health insurance is the saviour in such difficult conditions. To assist with that, insurers like Tata AIG provide you with the facility of cashless health insurance. However, one needs to understand the components of Health Insurance to take the best possible advantage of it. One such component in health insurance is TPA.

While proceeding to the article, we will look into their role, but first, let’s learn about third-party Administrators (TPAs).

 Who are Third-Party Administrators (TPAs)?

Hospitals or healthcare organisations that set up their healthcare unit often outsource the administration work to a third party. These third parties are called Third Party Administrators(TPAs).

A TPA is an organisation approved by the Insurance Regulatory and Development Authority of India (IRDAI) since 2001. These organisations act as an intermediary between insurance companies and policyholders, and thereby, they facilitate the processing of health insurance claims.

TPAs are vital in helping insurers and individual insurers throughout their insurance journey. Their help starts from finding a network hospital to submission of all necessary documents.

TPA is vital in providing hassle-free support for health insurance policies and in resolving claim-related issues. Some TPAs also offer supplementary services like hospital beds, doctor consultations, 27/7 helpline, pharmacy services, etc.

Being licensed by IRDAI, they sell health insurance plans and serve as a single point of contact for policyholders. This ensures prompt claim settlement in case of emergencies.

 How TPA in Health Insurance Aids Policyholders

To understand and completely utilise the health insurance support system, it is crucial to comprehend the role of TPAs in health insurance. Here are its various aspects:

 Issuance of Health Card

Some cards serve as a gateway to smoothen the claim settlement process. These cards are called health cards that are provided by insurers to policyholders. These cards act as a store of necessary information about the health insurance policy.

TPAs issue health cards on behalf of insurers. In times of need, health cards rescue policyholders and support cashless transactions during hospitalisation. These cards speed up the claim settlement process by allowing policyholders to easily access policy information.

 Standardising the Claim Process

Once a claim is submitted at the policyholder’s end, the TPA gets information. They then assist in expediting the claim process. TPAs are responsible for gathering all the necessary information about the hospitalisation, medical history of the insured, and other relevant information. This supports increasing the chances of getting your claim approved.

Since TPA serves a large number of insurance agencies and hospitals, they adhere to standard processes, which in turn help customers. In addition to this role, TPA plays several roles, which are discussed in the following section.

Easy Service Delivery 

The involvement of TPAs in the insurance industry has improved the quality of insurance services. Their role is crucial when it comes to processing claims and payment-related matters. Hence, they can take a large amount of work from insurance companies.

 Administration of the Policy

When it comes to health insurance, administration of insurance policies is critical. TPA plays an essential role in this regard. They take charge of various administrative tasks of managing insurance policies. Their contribution involves processing claims, maintaining policy records, and ensuring that the insured gets the benefits to which they are entitled.

 Network Management

One of the critical functions that TPAs perform is network management. They manage and are deemed to maintain a network of varied service providers. Stakeholders in their network include hospitals, doctors, and clinics, which are covered under the insurance policy. When a policyholder needs medical treatment, they can choose from the network of TPAs, and this would help in keeping the transactions cashless. TPA also makes sure that policyholders get quality treatment.

 Continuous Customer Support

Whether policyholders have questions about the policy or need help processing claims, TPAs always provide the necessary support. Their support is often available 24/7, ensuring that policyholders get support whenever they need it. TPA works as a connecting link between insurance companies and policyholders, which helps maintain operational efficiency and coordination.

 Record Maintenance

Record maintenance is a crucial aspect of the insurance industry. TPAs are responsible for maintaining accurate, up-to-date journals of policyholders’ essential data related to claims and other relevant data.

This is a meticulous job that ensures that insurance processes are carried out without any hassle. Moreover, it also helps record the history of policyholders’ claims and medical treatments, which are vital for future reference.


In a nutshell, the role of TPAs is vital in the health insurance online as well as offline ecosystem. TPAs handle administrative tasks, maintain networks of healthcare providers, offer continuous customer support, and keep detailed records.

Their functions contribute to an efficient health insurance experience for policyholders. Thereby ensuring that they receive the healthcare benefits they deserve. Happy buying and staying protected!