NEW DELHI :
If you’ve ever been hospitalized and filed for an insurance claim, it’s likely you’d have dealt with a third-party administrator (TPA). The involvement of a TPA, the intermediary between the insured person and the insurance company, can sometimes make the claim settlement process cumbersome, especially if the TPA isn’t proactive or does not have modern systems in place.
Soon you may be able to choose a TPA you find more efficient than the others. In a bid to improve transparency and efficiency, the Insurance Regulatory and Development Authority of India (Irdai), in its guidelines issued earlier in December, said insurers will now have to give policyholders the option to choose a TPA. However, you will need to choose among the TPAs engaged by your insurer.
But will you be able to effectively exercise this choice? “The policyholder may not know which TPA is good. They could end up asking their insurance agent to suggest one. This means the decision can be influenced by the insurance agent,” said Nayan Shah, Paramount Health Services and Insurance TPA Pvt. Ltd. If you want to make this choice independently, without getting influenced by an agent or intermediary, we tell you the things to consider, but first understand what TPAs do and the changes Irdai has brought in.
WHAT TPAs DO
Health insurers generally outsource the process of accepting intimations, approving cashless claims and settlement and disbursement of claims to TPAs, which issue identity cards to policyholders that are used at the time of hospitalization and filing of claims.
In case the need for hospitalization arises, you will have to inform your TPA, which will direct you to a hospital with which it has a tie- up. At the time of hospitalization, you will be required to show the identity card issued by the TPA. The hospital will then get an authorization letter from the TPA. Closer to discharge, the hospital will send all your bills to the TPA, who will forward the bills and other documents to the insurer for your claim to be processed.
Other than giving policyholders the option of choosing their TPA, Irdai has said that if the services of a TPA are terminated during the course of the health services rendered, then the policyholder should be allowed to pick another TPA.
You will have to choose a TPA at the time of buying the policy but in case you’re dissatisfied with its services, you will get an option to change the TPA at the time of renewal. Remember that if you don’t make a choice while buying the policy, then the insurer will allot a TPA of its choice.
More and more health insurers are now working on having an in-house facility. “This (in-house) facility makes the entire claims process convenient and seamless as the policyholder can directly coordinate with the insurer and the hospital, rather than having to coordinate with another external TPA,” said Anurag Rastogi, president, accident and health, HDFC ERGO General Insurance Co.
Newer concepts introduced by private insurers such as wellness initiatives, health returns, policy benefits are better serviced by an in-house ecosystem compared to TPAs, said Mayank Bathwal, managing director and CEO, Aditya Birla Health Insurance.
THINGS TO CONSIDER
Network: Hospitals normally have contracts with a list of TPAs and insurance companies. This information is displayed in all hospitals. The first step is to figure out which hospitals you are likely to frequent. Next, find out the TPAs engaged with these hospitals. Then get a list of TPAs empanelled with your insurer. “Compare both these lists and see which TPA you’d want to go with,” said Shah.
Find the TPAs common to both lists. But before you zero in on one, check the network hospital strength—the number of network hospitals across the country providing cashless claims facility— and the geographical spread of the TPA. A larger presence would mean not having to change your TPA in case you move from one city to another. “If the customer needs to change a TPA for any reason, the data of the customer is transferred from one TPA to the other. With regards to the TPA not having a presence in a city, the insurer normally provides an alternate arrangement,” said Amitabh Jain, head, motor and health, underwriting and claims, ICICI Lombard General Insurance Co. Ltd.
Efficiency: More and more policyholders are complaining of delay in discharge due to negotiations between the hospital, TPA and the insurers There have been cases where patients have had to wait for 8-10 hours for settlement. This is where having an efficient and more organized TPA helps.
“Discharge is a two-step process. The doctor needs to approve the discharge after which the billing department submits the claim. This is usually a 3-6 hours process which can create a perception of delayed discharge. Also, the insurer and the TPA need to ensure that the claim is processed fairly by adjudicating them correctly against policy benefits and provider contracts, which can sometimes take more time than estimated, causing delays,” said Jain.
Though the insurer takes the final decision on claim settlement, having a TPA that follows due process helps.
Digitization: Another aspect you should look at is the TPA’s digital capabilities such as the availability of a mobile app. “Definitely the technologically advanced TPAs are able to offer better services,” said Shah.
Cost: Note that you don’t need to pay anything extra to your TPA who is paid by the insurance company out of the premiums you pay. But you may end up receiving quotations from different TPAs engaged by your insurer when you file a claim.
“It’s possible to get rate cards from various TPAs and the costing also could be very different. This is because different TPAs negotiate differently with a hospital. This is a common phenomenon,” said Abhishek Bondia, principal officer and managing director, SecureNow.in. Despite getting different rate cards, you will have to go with the TPA you picked while buying the policy.
TPA rates are dependent on multiple factors. Apart from the services offered, the rates are based on factors like the brand and the servicing capacity of the TPA and the service experience at the time of claims, said Rastogi.
TPA rates for individual policies do not vary a lot. This is because insurers fix the amount based on the percentage of premiums or on per life basis, said Shah. “A group policy as a category is very competitive among TPAs which is why there could be a difference in the final quotations of different TPAs. If the costing is too low, then the quality of services may be questionable,” he added.
Currently, there are about 26 TPAs in the country. Shah said the new guideline could result in the elimination of the less competent TPAs, leading to some consolidation in the industry.