Third-Party Administrator

Acronym: TPA

A third-party administrator is a company that provides operational services such as claims processing and employee benefits management under contract to another company. Insurance companies and self-insured companies often outsource their claims processing to third parties. Thus, such companies are often called third-party claims administrators. Third-party claims administrators are commonly used by health insurance providers, who outsource many of their administrative functions. Not only claims administration but premium billing, customer enrollment, and other day-to-day operations are often handled this way. A hospital or a health provider organization that sets up its own health plan will often outsource the administrative responsibilities to a third party. A company that opts to self-fund its employee health insurance plan typically contracts with a third-party claims administrator to run the program. Source: [https://www.investopedia.com/terms/t/third-party-claims-administrator.asp](https://www.investopedia.com/terms/t/third-party-claims-administrator.asp)