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THIRD PARTY

ADMINISTRATORS

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Introduction to TPA

1. The influence of TPAs to a large extent would be determined by their activities, theway they organize their services and their revenue generation model.

2. In present form, TPAs earn their major revenue from fees charged as commissionon insurance premium.

3. The job of TPA s is to maintain a database of policy holders and issue identitycards with unique identification numbers to them. They also handle all the policy-

related issues, including claim settlements for the policy holders.

4. The TPA's are expected to provide value-added services to the consumers, likearranging ambulance services, medicines and supplies, guiding policy holders forspecialized consultation, and providing information about 24- hour help lines,health facilities, bed availability, organization of lifestyle management and well-being programs.

5. With the advent of TPA, the insurance companies aim at ensuring higherefficiency, standardization of charges, greater awareness and penetration of healthinsurance to a larger section of the people.

6. The TPA undoubtedly aims to give the health insurance industry the required boost

in India.

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The Services Provided by TPA are ID card: TPA provides ID cards to all their policyholders in order to validate their identity at

the time of admission.

The TPA's undertakes "Pre-authorization" before a surgical procedure to ease claim

processing

24 hours customer support services: The TPA provide assistance through their 24 hrs call

center that provides information regarding policyholder's data, provider network, claimstatus, benefits available with existing cardholder, etc All these details are furnished on

request.

Cashless Hospitalization: Each policyholder is provided with a list of empanelled hospitals

where in he/she can avail cashless hospitalization.

Claim Management: On behalf of the insurance companiesTPA administers and settles

claims for hospitals and policyholders.

Policyholders have the privilege of expressing their grievances to the concerned insurance

company or at the consumer's court if they are not satisfied with the services of a TPA.

http://www.medindia.net/patients/insurance/Health-insurance-TPAs-Services.htmhttp://www.medindia.net/patients/insurance/Health-insurance-TPAs-Services.htm

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The specialized functions of the TPA include: The TPA keeps and maintains all the records of medical insurance policies of an insurer.

The TPA issues identity cards to all the policyholders. The policyholders will have to show the

identity cards to the hospital authorities before availing any services from the hospital.

In case of a claim, policyholders will have to inform the TPA on a 24 hr toll- free line provided

by them

After informing the TPA, the policyholder will be directed to a hospital where the TPA has a

tied up arrangement. However, policyholders have the option to be admitted at another hospital

of their choice in which case, payment will be on reimbursement basis.

TPA pays for the treatment; they issue an authorization letter to the hospital for the admission

of the policyholder in the hospital.

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SPECIALIZED FUNCTIONS

At the point of discharge, all the bills will be sent to the TPA while

they are tracking the case of the insured at the hospital.

TPA makes the payment to the hospital.

TPA sends all the documents necessary for consideration of claims,

along with the bills to the insurance company.

The insurance company then reimburses the TPA

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Loss making TPAs

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Problems

1. The medical condition of the member is neverdeclared correctlymost cases during purchaseof the policy.

During the pre-authorisation process the TPA receivesinformation that has been "filtered" by the member, thedoctor and the hospital.

The large number of rejections at many large hospitals isdue to misdeclarations by the member, treating doctorand the hospital.

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Problems

There are mistakes committed by halfeducated ayurvedic, homeopathic anddoctors with little medical knowledge.

There has to be transparency ofinformation between the members,

hospitals, TPA's and the insurers. Else, allTPA's will err on the side of rejections.

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Problems

Industry experts rue that there is no

regulatory body to keep a watch on

healthcare providers. Also when a personbuys a policy, no HIV test is done. Besides,

the pre-medical tests are also minimal.

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Problems

TPAs across the country on conditions ofanonymity (for fear of losing business withhospitals) admitted that inflated medicalbills

is a countrywide phenomenon.

Severe competition has brought down the

price of corporate policies, eroding theactuarial premium base.

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Problems

Hospitals too have problems with TPAs.

Each hospital has its own policies. Thematter of charging a patient is between the

doctor and the patient. But every hospital

should standardise the doctor's fees.

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Problems

Hospitals face, timely payment issues with the

TPA. Many excuses cited by TPAs are

bureaucratic. They cite reasons such as miss-

spelt names and hospital signatures.

TPAs have a fast turnover of employees and poor

infrastructure and response time, all TPAs do nothave a 24-hour helpline, which they are obliged to

have.

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Solutions

Work should be handed over to the TPAs whocan have their own medical boards and inspectorsto bring efficiency in the system.

TPA as intermediary should share the premium ofMediclaim to provide better customer careservice. There should be a standard agreement

MOU format between the General InsuranceCompany (GIC) and TPAs. The hospitals can signan MOU with TPA on the standard format.

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Solutions The TPAs need funds to issue I-cards, customer

education brochures and run a call centre forcustomer queries or emergency calls.

TPAs should work on behalf of an insurancecompany and the administrative expenditureshould be borne by an insurance company.

Development of a good customer care attitude willdefinitely give a boost to Mediclaim business andprovide quick relief to the policy holder.

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Solutions

The TPA must keep a list of basic permissible chargesunder the Mediclaim policy for ready reference. Thischarge list can differ from city to city as the chargescan differ from hospital to hospital. The law of averagecan take out the basic permissible charge list from cityto city.

It requires the basic permissible charges throughout

India if the premium has to stay at one level.

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Solutions

The principal of uniform premium and uniform payout shouldbe adopted. The customers should be educated on theselines.

There should be no clash between the TPAs and thehospitals if this uniformity is announced.

In our country the Law of Average stands better than the Lawof Actual. The patient is reimbursed the stipulated actual oraverage charges, whichever is less.

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Solutions Uniform premium for uniform claims should be the

overall criteria. The excess amount should bepayable by the insured.

The role of TPA is really great as intermediarybetween every complaining customer and theconservative insurance companies except for theproper allocation of funds for the TPA and money

drain situation. It will be TPAs who will do therunning for the sick customer and bring relief orclaim to his or her residence.

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Thank You.