What is a TPA and Why Does It Control Your Health Claim?

When you file a health insurance claim, the entity that processes it is usually not your insurer — it is a Third Party Administrator.

What Is a TPA

The Intermediary in Your Claim Process

A Third Party Administrator is a company licensed by IRDAI to process health insurance claims on behalf of insurers. When you call your insurer's claim helpline, you are often speaking to a TPA. When a hospital sends a pre-authorisation request, it goes to the TPA.

Key fact: The TPA is not your insurer. They are a service provider hired by your insurer. Their decisions can be — and often should be — escalated directly to the insurer if you disagree.

The Incentive Problem

How TPA Compensation Creates Conflicts

TPAs are typically paid a percentage of premiums collected — not a percentage of claims paid. This means their financial interest can sometimes align more with limiting claim payouts than with your interest in receiving full payment.

Implication: A TPA denial is not necessarily the insurer's final position. Always escalate TPA denials to the insurer directly. Many TPA rejections are reversed at the insurer level.

How to Work With TPAs

Practical Tips for Claim Processing

For cashless claims, contact the TPA at least 48 hours before planned hospitalisation. For emergencies, contact within 24 hours. Always get reference numbers for every interaction. If a claim is denied, ask for the specific policy clause supporting the denial.

Direct insurer access: You always have the right to bypass the TPA and deal directly with your insurer's claims department. If a TPA is unresponsive, exercise this right.

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