Insurance Glossary

Font : A-A+

Insurance Term - Third Party Administrator (TPA)

A third party administrator (TPA) is an organization that processes insurance claims of the Insurer on behalf of the Insurance Company. They scrutinize the expenses incurred vis-à-vis coverage under the policy and ensure compliance of the policy terms and conditions, and warranties, subject to the limit of the sum insured. The insured or the policyholder needs to interact with the TPA for settlement of claims. The TPA also empanels hospitals to be part of the network to facilitate cashless settlement of claims. In short, a TPA is an individual or firm hired by an employer to handle claims processing, pay providers and manage other functions related to the operation of health insurance. The TPA is not the policyholder or the insurance company. It also incorporates any payer for healthcare services other than the concerned policyholder. This can be an insurance company, an HMO, a PPO or the Federal Government.