What is the role of Third Party Administrators (TPAs) in India's hospitalization insurance system?

TPAs handle claims management on behalf of insurers, serving as a bridge between insurers, hospitals, and policyholders.

How have hospitals responded to the growth of the insurance system in India?

Hospitals have realized the benefits of the insurance system, with even government hospitals preferring insured patients as a source of income.

What are the key issues plaguing the cashless treatment system in India's hospitalization insurance?

Insurers and hospitals often clash over tariff agreements and payment delays, leaving patients to bear the difference in costs.

Home / Business and Economy / Insurers and Hospitals Clash, Patients Caught in Cashless Crunch

Insurers and Hospitals Clash, Patients Caught in Cashless Crunch

10 Nov

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Summary

TPAs handle claims management for insurers, but face issues with delays and disputes
Hospitals prefer insured patients but clash with insurers over tariff agreements and payments
Lack of price discipline and uniformity in healthcare system hurts everyone

Insurers and Hospitals Clash, Patients Caught in Cashless Crunch

As of November 10th, 2025, India's hospitalization insurance system is grappling with a complex web of challenges involving insurers, Third Party Administrators (TPAs), and hospitals. TPAs, which were introduced in 2001 to handle claims management on behalf of insurers, have faced early difficulties in navigating both insurance and healthcare processes. Customers have complained of arbitrary claim reductions and outright rejections by TPAs.

Another issue has been the "float" problem, where insurers advance funds to TPAs for approved claims, but some TPAs delay payments to hospitals to earn interest on the idle funds, leading to disputes and tighter regulation.