Role of Third Party Administrators in the Denial of Health insurance Claims

Abstract

The Insurance Regulatory and Development Authority (IRDA) has defined the Third Party Administrators as “an insurance intermediary licensed by the authority who, either directly and indirectly, solicits or effects coverage of, underwrite, collect charge premium from an insured, or adjust or settle claims in connection with health insurance, except as an agent or broker or an insurer.” The arrival of Third Party Administrators (TPAs) as authorized entities in the Indian health insurance market dates back to 2001, when the Insurance Regulatory and Development Authority (IRDA) notified the regulations governing them. The advent of TPAs is expected to play an important role in health insurance market in ensuring better services to policy holders. In addition their presence is expected to address the cost and quality issues of the vast health care providers in India. However, the insurance sector still faces challenges of effectively institutionalizing the services of the TPA. A lot needs to be done in this direction. Towards this, the present paper describes the findings of the study which was carried out with the objective to define the role of TPA under Insurance act where the IRDA guidelines where issued the functions of TPA supporting to Insurance Act. But when coming to the fact that under Insurance Act there is no section which speaks about TPA role in the Health Insurance sector in India and this paper finds out the IRDA guidelines.