Third-Party Administrator (TPA)
An organization that processes insurance claims and handles other administrative tasks for an insurance company or self-insured employer.
Detailed Explanation
The TPA is essentially hired by the insurance company or employer to manage the day-to-day operations of the health plan.
Practical Example
While Blue Cross Blue Shield is the carrier for John's employer's health plan, a company called Zenith is the Third-Party Administrator that handles the processing of all the claims.
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