Health Insurance TPA of India to be launched soon
The Health Insurance TPA of India Ltd, which has been set up by public sector non-life insurance companies, to manage their health claims is all set to go live. Once it is operational, a portion of claims (8-10 per cent) that are now being handled by external third party administrators (TPAs) would move to the new body.
This TPA will help in reducing the turnaround time. The speculation that the new body will take away business from external TPAs is not true as initially it will only handle a small number of claims.
TPAs process health insurance claims and offer facilities like cashless settlement of claims for insurance companies.
The new entity will not only provide pre-authorisation service and process claims, it would also provide network empanelment, verification and investigation, and pre-policy health check-up.
The company is a joint venture of public sector non-life insurance companies – National Insurance Company, New India Assurance Company, United Insurance Company, Oriental Insurance Company, and General Insurance Corporation of India.
The first four have 23.75 per cent stake each in the new company while GIC has five per cent stake.
The internal TPA was set up to prohibit large-scale leakages while settling insurance claims in the health segment. Insurers expect the new body to speed up the claims settlement process and reduce the claims ratio of insurance firms.
This move is also expected to reduce costs for insurers, who pay a commission to TPAs for processing the claims.
The company has got a license from the Insurance Regulatory and Development Authority of India (IRDAI) to function as TPA and is now running trials.
TPA licenses are valid for three years from the date of issue or renewal.