Health Blog


Disadvantages of using third party administrator

Published on 2017-03-21 07:03:48

We care for our loved ones and ensure them good health. We ensure their wellbeing by providing them the most luxurious and expensive health benefits so that we can ease their pain and provide them the most comfortable medical services and treatment. But we may not have the financial stability to go for better treatment or we may not spend more for better healthcare services. Health insurance at this point of time comes to us as a great help.

Elderly Care

As people are struggling with adversities, it creates various serious, new, and incurable health hazards. Moreover, the costs of the treatments are becoming so expensive that meeting emergency and preventive health care is creating alarming concerns for us. It is difficult to bear the expenses of the better and advanced healthcare technology, solutions and services. Without a health insurance, it is difficult to manage the special and emergency healthcare expenses.

In India, the health insurance industry is having monumental growth as people are interested more in investing on health insurance. Among the prominent health insurance providers, an ideal practice is to do all insurance process management through a third party company which acts as medium for the insurer and insured. This is called third party administrator (TPA) in health insurance industry. They facilitate, aggregate and settle complains, claims and reimbursement. But in many cases we have found negligence, carelessness, and irresponsibility of the TPA service providers which leave the patient hectic and disgusting healthcare experience. The real purpose of the health insurance, for which you paid your hard earned money, not served. This is the irregularities and mismanagement of the TPA Company. Every consumer has right to received better healthcare benefits and services for which they are spending money.

 

Role of TPA in health insurance

In India, TPA is an IRDA approved specialized health care service provider. A TPA typically provides the insured with a variety of services like networking with hospitals, arranging for cashless hospitalization as well as claims processing & timely settlement. TPA is an initial pint of contact for the customers for any health insurance queries, claims and complains and other settlement related issues. They basically liaison between the insurer and insured and bridge the gap between them. They help the customers in case of planned and unplanned hospitalization, cashless hospitalization, and 24 hors customer support, faster claim settlement and reimbursement. They incur all the details of the customer and help managing the customers through online and offline support on behalf of the insurer.

 

Health care insurance

 

TPA has been benefiting both the insurer and the insured in the healthcare industry. The insurer is benefited by reducing administration costs and insured benefits from the 24 x 7 service and faster claim and cashless services. It provides enhanced services at same cost to the policy holders.

TPA has dedicated benefits to the insurer and insured:

  • It is helps faster claims management
  • It support reduced cost of claim management and lower overhead cost and
  • It provides highly trained claim management executives, 24/7
  • It facilitates cashless services with convenience
  • It encourages the safe custody of the customer details

After the creation of the policy, the role and responsibilities of TPA becomes prominent. According to its functioning, TPA:

  • Receives and manages the policy holder details
  • Issues identity cards with UID numbers to policy holders
  • Handles all issues related to their claim settlements.
  • Handles all the called and runs a24 hr toll free customer support centre
  • Appoints full-time medical practitioners to decide the authenticity of the ailment before closing claim

 

Disadvantages of using TPA

Though TPA has been providing many beneficial services and solutions to the insured customers, there are cases where the passive responses creates difficult situation for the customers. Usual complains about the TPA companies include undue attention to complains, lack of in time claim settlement, improper communication about the renewal of the policy, improper coordination and management in the network hospitals, delayed response towards cashless facilities in case of urgent hospitalization etc. Many times, if there is an unplanned treatment, the customers facing issues which are leaving them with pitiful situations.

Things can go wrong with TPA

Bangalore based software engineer Manjunath (name changed) got a worrisome and difficult cashless treatment experience in a reputed hospital in the city. One Friday night while coming back from office, he met with an accident which left him severely injured. Passer-by immediate rushed him to the hospital and called his friends to attend him. Fortunately, it was the networked hospital of his insurance company as provided by the TPA. Though his friend submitted the cashless card and other relevant documents to the hospital before an emergency operation, the hospital administrator asked for Manjunath’s friend to deposit 70,000 and get it reimbursed. It was very difficult to for his friend to arrange the amount in less time. When approached in the TPA representatives at the hospital, they were not able to help stating some invalid reason. The hospital authority made Manjunath stay one more in the hospital and forced him to pay the money before leaving the hospital. With still in the hospital bed, he called this relatives and parent to arrange the money and deposit in the hospital. Manjunath will never forget the inconvenience and non-cooperation received from the TPA. This suggests the negligence and responsibilities of the TPA company.

The pain and distress faced by Mumbai based businessman, Amit Kulkarni (name changed) is also worth mentioning. Kulkarni had to undergone an operation due to some internal stomach injury. But the classless treatment option and the management of the TPA gave him more pain than what he had experienced from the operation. Though he informed the TPA company and the insurer about the operation, he did not get proper help and coordination. The situation became worst when it was diagnosed high blood pressure after the surgery. The doctors suggest extra care and stay and it cost him extra expense. The total cost came to 70000 and the TPA was able to reimburse 54000. When contacted, the TPA informed Kulkarni to pay full amount to the hospital and get it reimbursed.

Kulkarni contacted his agent who advised him to pay the full amount to the hospital and then claimed from the TPA. It took him 2 months to get the reimbursed the 80% of the amount spent. These services could have promptly handled though a cashless service.

Disadvantages

As far as the disadvantages of TPAs are concerned, cashless facility can increases the chances the obtaining higher costs benefits for the insurers at the time of illness which leads to increase the cost of treatment with limit of 10 and 90 co-payment by insured and insured respectively.

The insurance premium general for public and the corporate offices are soaring up, as the TPA companies are not able to make benefits from the commission from the insurance company. According to IRDA and the Ministry Of Health, TPA should play an active role in community health insurance schemes and universal health scheme. The significance community health insurance schemes are limited.

Though TPAs make tall claims about their turnaround time but in reality that is not the case, an emergency case of six-hour wait could result fatal. In many cases, hospitals also share the blame; they don’t show clarity on pricing of the treatment. For example, they make an IT employee more for the similar surgery where the general public without health insurance as to pay less.

Many doctors and healthcare associates opine that TPA Company and hospitals must show a patient-friendly approach while handing the TPA issues. The must have single window clearance system for cashless settlements. Many cases, people don’t receive the cashless insurance card in time which create problem for them while going for urgent cashless treatment. Moreover, they face difficulties when they are not properly informed about the renewal of the insurance policy.

Risk associated with TPA

The following risks are associated with a TPA while going for a health insurance.

  • The insurer’s reputation can be damaged if there are fraudulent activities by the TPA company
  • The service quality is also getting compromised with insurer having less control on the TPA
  • Improper and poor management of claims can result in increasing claim cost and higher premiums
  • Justifying the tall claims of good services and superior claim management of the insurer is depends on TPA’s management
  • Improper networking of hospital harms reputation of the insurance company
  • Poor communication and delayed settlement process lead distress among the insured
  • Improper offline and online information management, cooperation and coordination leave the insured suffer a lot
  • Lack of in time claim settlement and improper management cashless treatment make the insured pay extra money

 

The TPAs have been playing an active role in settling the health insurance related issues and matters as mediators. They have been acting as mediums of bridging the gap between the insurer and insured. The reputation of the insurer and convenience to the customers hugely depend on the effective and efficient management of the settlement of the claims. But unfortunately, we have come across many cases where the insured had a tough time getting the expenses reimbursed and the claims settled. This is ideal for TPA to abide by the rules and regulation of the IRDA and work for the greater interest of the insurer and insured. Or else, the role of the TPA in managing and settling the claims will be shrinking in future. Before going for TPA assistance in getting medical insurance, check the authenticity, good track record, management skills and prompt services of the TPA company. Or else, you will end up getting trouble for claims and reimbursements. And there will be time, when the insurer will concentrate on the settling the claims and managing the insurance by themselves as in-house TPA company.