You should also consider other factors such as coverage benefits offered under the health policy, exclusions, claim settlement ratio of the insurers, waiting period, etc
The health insurance claim settlement process is one of the most important aspects of a policy. You can get your health insurance claim settled by the insurer in two ways -- in-house claim processing department and a TPA or third party administrator.
“While buying a policy, a buyer should understand that TPAs associated with the insurers are available for processing the health insurance claims only. They cannot accept or reject the claims, the authority for acceptance or rejection lies with insurers only. Besides, there are no TPAs for other kinds of insurance such as life insurance or motor insurance," said Ankit Agrawal, CEO and co-founder, InsuranceDekho.
A TPA acts as an intermediary between the insurer and the claimant, who facilitates the settlement/processing of health insurance claims. A TPA is appointed by the insurance company.
The in-house claim processing department, which is also known as Health Administration Team (HAT), is set up by insurers within their own company.
Both methods help in the claim settlement process and have some pros and cons. In this piece, we take a look at five major differences between them.
Better services than TPAs
To stand in the competition, the insurance companies provide unique facilities to the policyholders. Building an in-house claim process allows the insurance company to provide special offerings including ease on the claims handling front, lower Turnaround Time (TAT), etc. to policyholders from time to time.
Since the policyholder can directly deal with the insurer via the in-house claims settlement, it takes less time to process the claim compared to a TPA that acts as the middleman between the insurer and the policyholder.
“Sometimes, a TPA can be incompetent in handling a cluster of cases and rely on the insurer for decision," said Agrawal.
TPAs are reliant on insurers
TPAs are dependent on the insurers for settling health claims, which is not the case in the in-house claim settlement process as ultimately, the insurers are the ones to take care of health claims directly. This can be another benefit of choosing an in-house claim settlement process.
TPAs have a greater hospital network
TPAs have their list of network hospitals, which is mostly longer than that of the in-house claim settlement department of any insurer. Hence, it can be said that the extent of coverage for cashless treatment in-network hospitals of TPAs is greater than most of the insurance companies in India.
TPAs provide better claim settlement facilities
Agrawal said, “TPAs can provide better facilities to the policyholders to make claims under their health insurance policies by making the process easily understandable. While, in the case of the in-house claim settlement department, you have to go through the customer care route, which may take more time."
Both in-house claim department and TPA provide effective processes for health insurance claim settlement. While the mentioned differences can help you decide to choose rightly between health insurance companies offering TPA or an in-house claim settlement department, you must not take policy buying decisions solely based on these factors. Instead, you should consider other factors as well, such as coverage benefits offered under the health policy, exclusions, claim settlement ratio of the insurers, waiting period, etc.
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