The job of a TPA is to maintain databases of policy holders and issue them identity cards with unique identification numbers and handle all the post policy issues including claim settlements. In terms of infrastructure, the TPAs run a 24-hour toll-free number, which can be accessed from anywhere in the country. And they will have full-time medical practitioners under their employment who will immediately take a decision on whether the ailment is covered under the policy.

TPA license can be granted to any company registered under the Companies Act 1956. IRDA, which licenses and regulates these TPAs, has specified stiff entry norms some of which include a minimum capital requirement of 1 Crore, capping the foreign equity at 26% etc. License is usually granted for a period of 3 years.

Below is an overview of the activities of TPA

• All the records of medical insurance policies of an insurer will be transferred to the TPA.
• TPA may issue identity cards to all the policy holders, which they have to show to the hospital authorities before availing any hospitalisation services.
• In case of a claim, policy holder has to inform TPA on 24 hr toll free line provided by the TPA.
• On informing the TPA, policy holder will be directed to a hospital where the TPA has a tied up arrangement. However policy holder will have the option to join any other hospital of his choice, but in such case payment shall be on reimbursement basis.
• TPA issues an authorisation letter to the hospital, for the treatment wherein the TPA will pay for the treatment.
• TPA will be tracking the case of the insured at the hospital and at the point of discharge, all the bills will be sent to TPA.
• TPA makes the payment to the hospital.
• TPA sends all the documents necessary for consideration of claims, along with bills to the insurer.
• Insurer reimburses the TPA.