TPA (Third Party Administrator)

A Third Party Administrator (TPA) is an IRDAI-licensed company that processes health insurance claims on behalf of one or more insurers. The TPA is the operational interface between the policyholder, the hospital, and the insurer — issuing health cards, maintaining the network hospital list, taking the cashless intimation call, approving or declining pre-authorisation, scrutinising the bills at discharge, paying the hospital, and processing reimbursement claims when cashless is unavailable. The TPA is licensed under the IRDAI (Third Party Administrators - Health Services) Regulations 2016, which define minimum capital, professional conduct, claim turnaround standards, and audit obligations.

Worked example: Kabir's family floater is issued by a general insurer that has appointed a TPA for health claims. When his daughter is admitted with severe gastroenteritis, the hospital's insurance desk calls the TPA's 24x7 helpline, sends the pre-authorisation form by fax or portal, and receives an approval for ₹85,000 within four hours. At discharge, the final bill is ₹1,12,000; the TPA disallows ₹14,000 for non-medical items (attendant bed, deluxe diet, administrative charges) and clears ₹98,000 directly to the hospital.

The family pays the ₹14,000. The TPA records the entire transaction on the insurer's claims system and the bill is reconciled with the insurer at month-end. A common misconception is that the TPA decides claim outcomes independently.

The TPA operates within the parameters set by the insurer's policy wordings and underwriting guidelines, and it processes claims, but the legal contract is between the policyholder and the insurer — disputes ultimately escalate to the insurer, then to the IRDAI Bima Bharosa portal, and finally to the Insurance Ombudsman. Another common misconception is that all health policies use a TPA. Some larger insurers run an 'in-house' claims team without a third-party TPA, especially their newer retail products.

The functional experience for the policyholder is similar — there is still a helpline number, a network of hospitals, a pre-authorisation flow, and a discharge desk — but the entity processing the claim is the insurer itself. The policy schedule names the claims processor (TPA name and code, or 'in-house claims team') so the policyholder knows whom to call at admission. Related: cashless, network-hospital, claim-intimation.