Third Party Administrator (TPA) - Health Insurance Definition
A Third Party Administrator is
the same as an ASO
- administrative services only company. The
duties of the TPA is to serve as the liaison between
the insured person or company and the health insurance
provider.
This TPA company will typically file claims for
the insured, but will also certify insurability
for the insurance company. That means that the
TPA works for both the insured and the provider,
though the continued employment will typically
depend on the satisfaction of the provider.
The third part administrator company may also
be hired if a company provides self-insurance.
In that case, the TPA will not only handle claims
from the common pool of money for that purpose,
it will also coordinate payment of catastrophic
illness premiums
and other details of the insurance program.
It’s important to note that a TPA is not
the same as a health insurance broker.
While a broker sells an insurance policy and provides
on-going customer service related to the policy,
he or she does not handle claims or become involved
in the actual process of medical care. |
