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A TPA applies the guidelines and coverages of a benefit plan to the medical bills of the employees who are covered by it. This includes more than 250 activities surrounding administration, accounting, and claims adjudication.
A TPA is not an insurance company. It does not take financial risk with regard to the delivery of healthcare services. A TPA is more of a clearinghouse. It simply applies the rules of coverage to the medical bills of employees who are covered by it. Then it arranges for payment of authorized claims. And it collects a fee for this service. |