Definition
Third-Party Administrator (TPA)
A Third-Party Administrator is an IRDAI-licensed intermediary that processes health insurance claims and manages cashless services on behalf of insurers.
TPAs act as the operational link between policyholders, hospitals and insurers, issuing health cards, granting cashless pre-authorisations, verifying bills and settling claims. Some insurers outsource these functions to TPAs while others run in-house claim teams.
The quality of the TPA materially affects the policyholder's experience, since delays or rejections often happen at this stage. IRDAI regulates TPAs and has set service standards. Policyholders can usually check whether their insurer uses a TPA or in-house settlement, which can influence claim turnaround.
Related terms
- Network HospitalA network hospital is a healthcare provider that has a tie-up with the insurer or TPA to offer cashless treatment to policyholders.
- Cashless ClaimA cashless claim is a settlement method where the insurer or TPA pays the network hospital directly, sparing the policyholder from upfront payment of covered costs.
- Preferred Provider Network (PPN)A Preferred Provider Network is a subset of network hospitals that have agreed package rates with insurers for common procedures.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.