Health Insurance And Third Party Administrator
A reliable health insurance can ease part of the tension associated with falling ill. In India, health insurance is gathering momentum, with many state governments tying up with private insurance companies to provide decent health insurance cover for their people. Healthcare in India is seeing a gradual shift of focus from public sector hospitals to private corporate hospitals. However, by and large the common man is still ignorant about the very concepts of insurance. Health insurance is only a component of different types of insurance cover. Understanding the fine print of the health insurance policy will help you understand the scope of the policy and its limitations, which are seldom spelled out by the agent selling you their products. One needs to understand and interpret only the important clauses incorporated under Health Insurance Policy by various Public Sector Undertakings and Private Insurance Companies in India.
A Third Party Administrator is an organization which processes health insurance claims or provides cashless facilities as a separate entity. Seen as an outsourcing of claim processing, Third Party Administrator processes claims for both retail and corporate health insurance policies. The risk of loss incurred remains with the health insurance company. The health insurance company usually contracts a reinsurance company to share its risk. An insurance company hires Third Party Administrator to manage its claims processing, provider network and utilization review. While some Third Party Administrator operates as units of health insurance companies, most are often independent.
Third Party Administrator is also involved in handling employee benefit plans such as processing retirement plans. Handling healthcare or employee benefit claims requires using a specialized set of manpower and technology, therefore hiring a Third Party Administrator for the same is a more cost effective method.The Insurance Regulatory and Development Authority of India (IRDA) defines Third Party Administrator as one who, for the time being, is licensed by the Authority, and is engaged, for a fee or remuneration, in the agreement with a health insurance company, for the provision of health services. Third Party Administrator was introduced by the IRDA in 2001.
Being one of the prominent players in the managed care industry, it has the expertise and capability to administer all or a portion of the health insurance claims process. The services include claims processing, premium collection, enrollment and cashless processing. Health insurance companies setting up its own health plan often outsource certain responsibilities to a Third Party Administrator. The Third Party Administrator acts like a claims adjuster for the health insurance company. In some cases the insurance company sets up an entire department within their own company to act as Third Party Administrator as opposed to hiring a commercial Third Party Administrator company.
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