As name TPA-Third party administrator indicates,health insurance companies are allowed to render remuneration based health services from third party associates. TPA can work for any number of insurance companies.
If any insurance company is offering group insurance for firm having thousands of employees,its not possible for it to handle higher number of claims.As TPAs are specialized for health services,insurance companies can execute the claim processes more efficiently.
Similar to health insurance companies,TPAs are regulated by IRDA and TPA needs to be licensed by IRDA to carry the business.Only company registered under companies act and having minimum working capital of Rs.1 crore at any point of time can apply for TPA license.
TPAs are generally hired for the work of claim settlements as well to process cases of cashless mediclaim . TPAs can also hired for other health services also but they are not allowed to sell products on the behalf of any insurance company.
License issued to TPAs is vaild for three years but it can be terminated early if TPA found functioning against the interest of policy holders or insurance company.So though claim settlement is outsourced to third party,interest of policy holders is generally protected.
Its not mandatory that insurance company will settle claims through TPA only..few companies like star health have own system of claim settlement.
If you are policy holder then you should have idea about the claim settlement.If you have bought the policy directly from insurance company then name of authorized TPA will be in the brochure / document issued by company.If you are covered through group mediclaim offered by employer then you may need to contact your HR department for more details.
