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How to choose the right TPA to settle health policy claims

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A TPA is a company registered with the Insurance Regulatory and Development Authority of India (Irdai) and engaged by a health insurer, which helps in providing healthcare services to policyholders, primarily claims settlement. It is an intermediary between policyholders and the insurance company.

You can choose a TPA at the time of buying the policy and if you aren’t satisfied with its services, you can change the TPA at the time of renewal.

However, if you don’t choose while buying the policy, then the insurer will allot a TPA of its choice.

A health insurance TPA does not sell insurance policies. The key function of a TPA is to process and settle claims with the help of documents provided by the policyholders.

A TPA issues health cards to policyholders that are used at the time of hospitalization and filing of claims. It also helps in maintaining the policy database, tracking claim status, among others.

Rakesh Goyal, director, Probus Insurance, said that TPAs are not responsible for claims rejection or acceptance. “TPAs scrutinize only documents, hospital bills and give the go-ahead for the claims,” he said.

Not all insurers use TPAs; some have in-house settlement systems in place.

TPA vs in-house settlement

There are various services and day-to-day operations of health insurers that are handled by TPAs. TPAs employ professionally qualified doctors to ensure all claims are fairly reviewed for medical treatment as well as commercial charging. TPAs have also built relationships with hospital networks to ensure policyholders get the best rates.

However, since TPAs act as an intermediary between policyholders and the insurer, the settlement of the claim process can get delayed due to the negotiation between the hospital, TPA and the insurer.

Moreover, TPAs with primitive technology can also cause delays compared to an in-house claim settlement process.

In the case of the in-house claim settlement process, insurers set up an entire department within their own company to act as an in-house claims processing department, instead of taking the services of a TPA.

“The most important advantage of having an in-house claim settlement process is that the turnaround time for claim settlement is faster as the decisions are directly taken between insurers and policyholders,” said Goyal.

Echoing similar views, Sanjay Datta, chief – underwriting, claims and reinsurance, ICICI Lombard General Insurance, said that the TPA and in-house claim settlement teams both do the same job of servicing the policyholders for claims and other services.

In the in-house claims process, the claims settlement has the advantage of leveraging the scale and investments in technology, being part of large organizations.

“Also, the in-house processing team focuses on turnaround times and quality and make constant investments in technology for the same,” added Datta.

How to choose a TPA

Not every insurer has an in-house claim settlement process. Hence, you may have to choose a TPA while buying a health policy.

Therefore, while opting for a TPA, you must consider looking at the list of network hospitals under a TPA. Figure out which hospitals are close to your home, or you are likely to visit frequently. Then find out the TPAs engaged with those hospitals.

Compare the healthcare services offered by those TPAs online by visiting their website.

Some TPAs also provide value-added services such as wellness programmes and health facilities during emergencies. Some TPAs also deliver their services through a mobile app.

According to Shankar Bali, joint managing director, Vidal Health, a TPA: “TPAs have been adjudicating claims fairly for nearly two decades. You must go with the TPA that has built robust processes, invested in technology and created efficiencies in claims processing.”

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