TPA vs. In-house Application Department – Which is Better for Clients?

TPA vs Third Party Administrator in Health Insurance

This blog talks about the difference between the two complaint departments – TPA and In-House and which one is considered better for customers. Read on to find out.

When you need to file a claim as part of your claim health insurance, you can do this directly with the insurer or with a TPA. What exactly is a TPA and is it different from an insurance department? Let’s understand all this in this post.

Complete TPA Form in Medical Insurance

Before we continue, let’s start by explaining what TPA stands for so that it doesn’t get confused with insurance. TPA they refer to a Third Officer and, as you understand now, health insurance TPA is separate from your insurance company.

Your insurer may subsidize a third party to handle all claims from policyholders on behalf of the insurance company. This third party is known as a TPA in health insurance. Interestingly, insurance and TPA insurance work differently when it comes to handling insurance claims.

What is a Third Party Manager?

Let’s start by understanding what TPA is and its role in health insurance. The TPA desk is essentially an external support team that handles all medical complaints filed in the hospital. Your insurance company appoints this support group to help mediate between the hospital’s management and the insured to settle both claims.

Acting as an intermediary, the third-party insurance adjuster oversees all communications and correspondence between the insurer and the policyholder regarding claims. It should be remembered here though that the TPA is only an intermediary and does not have the power to accept or reject the insurance claim that has been provided by the insured.

It only works to make the whole process easier for both the insured and the medical staff on behalf of the insurance company. The final authority to accept and reject the claims and to refund the money to each individual rests with the policyholder.

What Do Third Party Administrators Do?

Now that we have understood what the TPA group is, let us now look at its actual role and how it works when it comes to medical insurance claims. The TPA desk has the following three roles:

  1. They partner with one or more insurance providers to help them with their policyholder payment obligations.
  2. It acts as a point of contact with the insurance company when the latter files a claim with the insurance company
  3. They provide full support and answer all questions from policyholders that they may have during the application process, assisting them until the claim is resolved.

Note: Insurance Regulatory Authority of India (IRDAI) has granted license to about 26 Third-Party Administration companies in India. Each TPA has a unique code that the insured must enter when writing an application to the insurance company.

Definition of Domestic Grievance Panel

Now let’s move on to another group that is involved in the health insurance policy for people who have insurance. The home insurance team is the unit of your insurance company that handles all insurance claims within the company. It is therefore different from the external TPA desk described above.

Every insurance company has a dedicated department to handle all the medical complaints filed by the insured. Unlike the TPA, this group communicates directly with the insured to fulfill all requests.

The main activities of the in-house crime removal team are:

  1. Directly communicates with policyholders to fulfill their requests
  2. Responsible for all communications related to requirements, updates, and any other information directly with policyholders
  3. Resolves all policyholder queries regarding claim denials etc
  4. Provide updates to the insured on any changes that have been implemented in the underwriting and billing of the insurance company, provide a list of network hospitals, and any other information that should be provided as required.

TPA or In-House Application Department: Which is Better for Customers?

We discussed in detail above the meaning of TPA and the in-house claims department of the insurance company. We also discussed each of the responsibilities and how they work in relation to the reimbursement of the insured. Now, a common question that many policyholders have is who should actually go or get there to submit a request. Which team is best for the end customer?

If you look closely, the services provided by an in-house litigation support team clearly outweigh the benefits of a third-party administrator in health insurance. The following proves this point:

  • Hassle-free complaint resolution: The home loan department is the one point of contact for the law enforcement, which means an easy and hassle-free way to resolve cases. In the case of a TPA desk, multiple customer leads may be assigned to a single claimant which may lead to unnecessary confusion and high demand.
  • Quick Turnaround Time (TAT): When a policyholder submits a claim, a Relationship Manager appointed by the in-house claims department is committed to handling all insurance questions. This improves the TAT of each request, unlike the TPA team which usually takes a long time to respond to queries.
  • Low cost: Since the TPA desk is an insurance agency, it is often cheaper than dealing directly with the mortgage department. The latter services prove to be cheaper for the customer, and because there are no middlemen involved in refunds that means more money.


As can be understood from this post, the in-house claims department is usually better at answering and responding to requests directly from the insured. Hence, this proves to be more efficient and customer friendly against TPA desk.

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