Health Insurance TPA may become operational only by December-end

The Health Insurance TPA of India was incorporated in August 2013 to handle health insurance claims of state-owned insurers

M Saraswathy  |  Mumbai 

April 5, 2014

Health Insurance TPA of India, the in-house third party administrator (TPA) of the state-owned general insurance companies might begin operations only by December 2014, instead of the scheduled April 2014, since the entity is yet to get a license from the insurance regulator.

The common TPA of the four public general insurers has already applied for a TPA license to the Insurance Regulatory and Development Authority few months ago. However, it is yet to receive the license.

Officials from the regulatory office said that on an average, it takes a longer time for a TPA license to be processed and that the process has already begun.

“We are waiting for the license and expect to begin functioning from December 2014. Meanwhile, the team is already in place and we are setting up all the software-systems in place,” said an official of the TPA.

The Health Insurance TPA of India was incorporated in August 2013 to handle health insurance claims of state-owned insurers. These claims are now handled by external TPAs.

This common TPA to process health claims has National Insurance Company, New India Assurance Company, United Insurance Company, Oriental Insurance Company and General Insurance Corporation of India as stakeholders.

According to details sourced from company filings with the ministry of corporate affairs, the incorporation document said the parties shall at all times be committed to increase the share capital of the company till at least Rs 200 crore, if the board of directors so decides.

Subject to regulatory approvals, Health Insurance TPA shall provide end-to-end ‘Health Services’. This would include member enrolment, call centre, customer service and grievance management, pre-authorisation and claims processing. Further, it would also be involved in provider network empanelment, verification and investigation, pre-policy health check-up and facilitate customer awareness and wellness programmes.

Health insurance loss ratios range from 95 to 100 per cent, depending on the size of the company. Loss ratios refer to the ratio between premiums collected and claims paid. However, with stiff competition in group health portfolio with aggressive discounts given to retain customers, the losses have been on the rise.

An external TPA handling claims will add to the costs, hence public general insurers went in for a common TPA. However, till it is operationalised, losses are expected to continue.

The company shall provide services to support all types of health insurance policies sold by insurance companies in India. This includes individual, family floater, group covers, mass schemes, indemnity, fixed benefit among others. The common TPA has been proposed to prohibit large-scale leakages while settling insurance claims in the health segment.

Those in the sector said this common TPA was expected to speed up the claim-settlement process, as well as reduce the claims ratio of insurance companies.  This move is expected to reduce costs for these insurance companies, which pay a commission of approximately 6 per cent of premiums to TPAs to settle claims.

P K Bhagat has been appointed the first managing director and chief executive officer of Health Insurance TPA (third-party administrator) of India for a period of two  years or till the time he attains superannuation.

When the TPA comes into operation, the claims handling and processing from external agencies will gradually be transferred to the new entity. Health Insurance TPA of India has been formed with an authorised capital of Rs 300 crore and paid-up capital of Rs 10 crore.

 

Private hospitals to stop CGHS cashless scheme from March 7

BANGALORE: In a blow to government employees, including those who have retired, the Central Government Health Service has announced withdrawal of cashless medical service in private hospitals empanelled with the CGHS scheme from March 7. Patients will henceforth have to cough up hospital charges and later claim the amount from the government, according to the new rule.

The move will affect 50 lakh serving employees and over 30 lakh pensioners, as well as their family members. At a conservative estimate, the total number of persons affected could well be over two crore.

The move was necessary, said the Association of Healthcare Providers India (or AHPI, the nodal body of private empanelled hospitals) for a number of reasons, the main ones being CGHS owes these hospitals around Rs 200 crore in unpaid services as well as “unreasonably low” CGHS tariffs that haven’t been revised for the last four years. A doctor’s consultation fee, for example, remains Rs 58.

Also, AHPI says CGHS makes “illegal” deductions of 10% on all payments leading to losses for member hospitals. AHPI claims the amount runs up to Rs 180 crore.

In Karnataka, 20 hospitals, all in Bangalore, are empanelled with AHPI. HCG, Apollo hospitals, MS Ramaiah Memorial Hospital and Bangalore Baptist Hospital, among others, will not provide the cashless health scheme from March 7.

“When we were empanelled with the government, it was agreed upon that we will get 10% rebate on treatment charges if the government pays within seven days. But now, this deduction has been made applicable even when the amount is unpaid for years. That’s illegal. This has led to huge losses for member hospitals amounting to over Rs 180 crore over the past three years,” says Dr Alexander Thomas, CEO, Bangalore Baptist hospital, who represents AHPI in Bangalore.

Some hospitals have put up a public notice to this effect, reading, “CGHS tariffs are unreasonably low and not been revised for the last four years, threatening the very existence of the medical service providers.”

Dr Naresh Shetty of AHPI said, “The empanelled hospitals have been providing services under most difficult circumstances. They had to deal with steep hikes in electricity and water tariff, consumables, wages, taxes. We’ve been requesting a revision since June 2013 but there’s been no response.”

Official speak

The dues are just one issue. The bigger issue is that a doctor’s consultation charge of Rs 58 is appalling. The fees for several procedures are abysmally low. We don’t want to let down our beneficiaries but we have no choice. We ask the CGHS to consider the rates of the National Accreditation Board for Hospitals & Healthcare Providers. We’ve suggested that if at all CGHS were to take tender route, let CGHS decide the rates based on lowest bid received from NABH – accredited hospitals. Adopting rates like this would be logical and rational. Treating a patient can’t be made similar to selling onions and potatoes.

Giridhar K Gyani | director general, AHPI, New Delhi

Reference:http://timesofindia.indiatimes.com/india/Private-hospitals-to-stop-CGHS-cashless-scheme-from-March-7/articleshow/31438842.cms

Health Insurance Cover To Get Cheaper With Health Grid

Health Insurance Cover To Get Cheaper With Health Grid

In the direction of forming health insurance and information grid, Insurance Information Bureau (IIB) and Insurance Regulatory and Development Authority (IRDA) are willing to involve insurance companies, third-party administrators (TPAs) and hospitals. Delighted with the reform, insurers see a better future of health insurance industry where they can identify the loopholes.Creation of unique identity number for hospitals is the first step taken by IIB in this direction and now insurers can concentrate only on the registered hospitals as there are many hospitals with the same name. This initiative will generate transparency and health insurance charges can be capped, as quoted by the chief executive of a private general insurance firm. He also informed that the renewal of agreement between insurer and hospitals will be dependent on the unique identity number provided by IIB.As T S Vijayan, IRDA chairman reported, this system is likely to help insurers identify the registered hospitals and create a data centre scattering information of the charges for various procedures. He added that the unique number will be incorporated with the name of hospital and the pin code of the area. IRDA is collecting transactional data from various insurers which can help them to compare the charges offered by various hospitals.IIB is collecting health insurance data from all the transactions done with insurers, hospitals and TPAs to work on its analytics and data upgradation process form insurance sector.

Sanjay Datta, head of underwriting and claims said that health insurance grid will be acting like an imperative connector regarding health insurance data exchange between insurer, insured and health service provider.

Officials of IIB informed that targeting 380,000 hospitals, they are done with 30,000 hospitals and the identification is done on the basis of title, address and pin code.

CEO of IIB, R.Raghvan said that with this reform, insurers can have a uniform list of hospitals and charges claimed for different procedures. Any new hospital joining the system will be added to this list. This way, health insurance industry can keep a keen eye on the claim system and work with the transparency in terms of cost and chucking out discrepancies.General Manager of a public general insurer reported that even for patient under health insurance policy, various hospitals charge different rates which can be tracked through health insurance grid. Such misconduct when noticed by the regulatory body can offer reduced cost for insurers and customers.

Written by : Policy Bazaar , 3rd jan 2014.

External third-party administrators (TPAs) will continue to serve state-owned general insurers for the foreseeable future

External third-party administrators (TPAs) will continue to serve state-owned general insurers for the foreseeable future.

“While the Health Insurance TPA of India has been set up exclusively to manage health claims of public general insurers, the entire TPA business will not be transferred to them. We will begin by 45-50 per cent business from the in-house TPA and rest will be from external TPAs,” said a senior official from a state-owned general insurer.

Health Insurance TPA of India is expected to begin doing business by April 1, 2014. Improvement in customer service and increasing the efficiency in claims processing is its aim.

This common TPA to process health claims has National Insurance Company, New India Assurance Company, United Insurance Company, Oriental Insurance Company and General Insurance Corporation of India as stakeholders. The first four have 23.75 per cent stake each and GIC has five per cent.

This TPA will look into health claims and handle a majority of the claims received by these general insurers. The common TPA has been proposed to prohibit large-scale leakages, while settling insurance claims in the health segment. Further, it is intended to process claims of public general insurers in-house, rather than handling by an external agency.

Though initially it was said the in-house TPA would handle all claims, it is now envisaged that only 70-75 per cent of the total business would be shifted.

Other TPAs also believe their business won’t be drastically affected. “While some shifts in business will happen, we don’t see the in-house TPA as a threat. In fact, it will complement our services,” said the chief executive of a large external TPA that caters to the government-owned insurance companies.

The common TPA is expected to reduce costs for these companies, which pay a commission of approximately six per cent of premiums to TPAs for settling claims. Currently, most claims in the health segment are handled by external players, which has increased the time taken to settle claims.

“During the initial period of setting up of operations, we intend to take assistance from consultants to build a world-class organisation, with robust information technology systems, bringing in some of the best practices from developed markets,” P K Bhagat, managing director of the Health Insurance TPA of India, had told Business Standard earlier.

After the in-house TPA begins business operations, the claims handling and processing from external agencies will gradually be transferred to the new entity. The entity has been formed with an authorised capital of Rs 300 crore and paid-up capital of Rs 10 crore.

SOURCE: http://www.business-standard.com/article/finance/external-tpas-may-not-be-completely-routed-out-by-public-general-insurers-113121600852_1.html

IRDA | Insurance Regulatory and Development Authority | Insurance Information Bureau | IIB | health insurance grid

HYDERABAD: Insurance Information Bureau (IIB), an independent body created by the Insurance Regulatory and Development Authority (IRDA), would be maintaining a health insurance grid connecting TPAs, insurers and hospitals.

TS Vijayan, Chairman, IRDA, said that IIB has already launched a pilot hospital unique ID master programme by enlisting the hospitals in ‘the preferred provider network’ serving the health insurance sector.

IIB functions as a single window analytics organisation for the entire data requirements of the insurance sector.

The aim of the initiative is to help the health insurance sector to come out with a system of insurance claims management with transparency in treatment costs and efficient pricing of health insurance products, Vijayan said after inaugurating IIB’s new premises here.

On the roadmap for the insurance sector, Vijayan said the growth in premium is estimated at Rs 4 lakh crore constituting both life and non-life during current fiscal.

While the rate of growth in non-life is expected to be about 16 to 17 per cent, it could be less than 10 per cent in life segment, The IRDA chief said.
http://economictimes.indiatimes.com/personal-finance/insurance/insurance-news/insurance-information-bureau-to-maintain-health-insurance-grid/articleshow/27485044.cms

Health claims: IRDA asks insurers for guidelines to TPAs

Insurance sector regulator IRDA has asked all general insurance companies to send detailed guidelines to third party administrators (TPAs) for payment of claim settlements related to health insurance.

As per IRDA (Health Insurance) regulations, TPAs may handle claims, admissions and recommend to the insurer for the payment of claim settlement on the condition detailed guideline is prescribed by the insurer to TPA for claim settlement.

However, TPAs are not allowed for claim settlements and rejections with respect to health insurance policies.

“Every insurer utilising third party administrators is advised to send a specific confirmation to this effect to the Authority on or before September 30, 2013,” IRDA circular said today.

The Insurance Regulatory and Development Authority has advised all the insurers to ensure that detailed guidelines are prepared and given to the respective TPA as per its regulation.

TPAs are engaged for the purpose of providing health services on the basis of a fee or remuneration by an insurance company.
http://articles.economictimes.indiatimes.com/2013-08-14/news/41409900_1_tpas-insurance-regulatory-irda

Part of claim amount is borne by the employee; this results in lower premium outgo for India Inc

Faced with rising outgo on account of health insurance premiums, India Inc is increasingly shifting to the co-payment model, whereby up to 25 per cent of the claim amount will have to be borne by the employee. The insurance company will pay the balance.

Co-payment provides tangible benefits to companies in terms of reduced insurance premium.

Typically, the co-payment ratio for the employee ranges from 10-25 per cent. So, for every claim of Rs 1 lakh the policyholder has to shell out Rs 10,000 from his/her pocket, before the insurer pays up the remaining Rs 90,000.

According to Sanjay Datta, head of underwriting and claims, ICICI Lombard General Insurance, “Employers are increasingly resorting to co-payment to ensure optimal utilisation of benefits by policyholders. For example, the insured may not go in for a deluxe room when he is footing a part of the claim.”

Most general insurers feel co-payment in health insurance policies will also ensure that hospitals don’t jack up the prices for the insured.

For New India Assurance, the country’s largest insurer, almost 20 per cent of their group health insurance policies have a co-payment clause, said general manager Segar Sampathkumar.

According to a recent report by ICICI Lombard General Insurance, the preference for co-pay has increased to 18 per cent of all group health insurance policies in fiscal 2012-13 from 16 per cent in the year-ago period.

However, other cost containment measures, such as applying sub-limits on the claim amount on common illnesses, such as cataract or kidney stone have fallen to 10 per cent in FY13 from 34 per cent during the previous fiscal.

Interestingly, industry experts say, many insurance companies have started introducing co-pay clause for individual health insurance policies sold to senior citizens. For instance, New India Assurance has a co-payment clause for new policies sold to individuals over the age of 55
http://www.thehindubusinessline.com/industry-and-economy/banking/health-insurance-firms-moving-to-copayment-model-to-cut-costs/article5045494.ece

IRDA Guidelines: Key consumer centric points.

IRDA came out with numerous initiatives last year including draft health insurance guidelines. While these will help to confine the role of TPA to claims processing and not settlement, there are other vital issues that has to be addressed.

• Senior citizens disallowed increase in Sum Insured (SI) – Survivors of critical illness like cancer are also not given any increase in SI by the insurance company.

Action required – There should be mandatory allowance for inflation-linked increase in sum insured irrespective of past claims history.

• Need to cover prosthetics and artificial limbs for disabled – All insurance providers to be mandated by regulations to offer mediclaim and accident cover policies to cover the cost of provision of prosthesis/artificial limbs to the insured person, up to the sum insured and without any artificial cap. At the moment, not all insurance companies cover the cost of prosthetics.

Action required – need for mediclaim to cover prosthesis.

• 24 hour hospitalisation mandatory to approve claims – Today technological advancement does not necessitate hospitals to keep the insured for more than 24 hours in many cases.

Action required – More day-care procedures need to be added to mediclaim. IRDA should make insurance companies’ needs realistic rather than mechanical

• Cashless facility is restricted to preferred-provider-network (PPN) which does not include majority of high-end hospitals for government insurers. This issue is only for retail and not for corporate mediclaim policies.

Action required – If cashless is offered for corporate mediclaim, the same insurance company cannot disallow retail mediclam policies from getting same benefit. Just because individuals have less bargaining power, insurance companies can get away with it. Cashless facility must be re-started for retail consumers, at all Quality Council of India (QCI) accredited hospitals and nursing homes.

Health Insurance Companies in India are fuming nonetheless as new changes proposed by IRDA could hurt their profitability

With the stressful modern day lives that we lead today, health is increasingly becoming a cause of concern.

To avoid hassles of huge medical expenses in case of an unforeseen illness, having an adequate health insurance cover is recommended time and again by financial planners.

But if past experiences are anything to go by, health insurance policy holders have had to run from pillar to post at the time of settlement of claims. Settlement would take forever and even when you did receive a settlement cheque, only a part of your medical expenses used to be covered without any plausible explanation as to why only a certain part of your claims was covered and the other part was rejected.

In order to address these longstanding grouses that insurers had against insurance companies, the insurance regulatory authority of India, Insurance Regulatory and Development Authority of India (IRDA) is making an attempt to “clean up” the grey areas and present the Indian citizens with better health insurance policies.

IRDA released new draft regulations for health insurance, which have currently been put up for public review. Here is a closer look at the main changes that have been proposed by IRDA.
RENEWABLE FOR A LIFETIME

Henceforth, all insurance policies are proposed to be renewable for life. This means that senior citizens who are most likely to need health insurance in advancing years to take care of their medical expenses are not left out of the ambit of the health insurance policies.
A DEADLINE OF 30 DAYS TO CLAIM SETTLEMENT

Unlike the current scheme of things where claiming settlement can take up to as much as six months and can be very frustrating for the claimants to say the least, the new regulations propose that claims need to be settled within a time frame of a maximum of 30 days after all the required documents have been submitted.

If the claimant does not receive his claim within 30 days, he can question his insurer. Interestingly, this clause was present in the original draft of the health insurance regulations in India, but was never implemented by health insurance companies.
DIRECT PAYMENT TO HOSPITALS

IRDA has proposed that all payments be made directly to hospitals in order to make the payment process smooth and hassle free. So far, settlement-claiming cheques used to come from the end of third party administrators, which used to delay the payment process greatly. Besides, it was impossible for a customer to find out whether the entire amount that had been sanctioned by the insurer had been passed on to the claimant or not.

 

 
PROVIDE STANDARD DEFINITIONS

Currently there is a lot of ambiguity about the various illnesses that are critical and those that have been permanently excluded from the purview of health insurance policies.

In order to rectify this, the IRDA has suggested that all health insurance companies be provided with standard definitions of terms that need to be understood by customers before they make a prudent choice. This is an important change and is expected to go a long way in altering the way health insurance policies are sold in the country.
SPECIFY REASONS FOR CLAIM DENIAL

In case a health insurance company is rejecting a claim, it has to explain in writing the reasons why the claim is being rejected. This is as opposed to the current practice of rejecting claims on grounds that are utterly flimsy or worse still, rejecting claims without any explanation at all.
MAXIMUM BENEFITS FROM MULTIPLE POLICIES

Until now, if a claim was made on two policies, it used to be split between the two health insurers in the ratio of the sum that was insured.

The new regulations, however, propose that the claimant will get to choose between the two policies that he holds. This will be particularly beneficial for those who get an insurance policy as part of their employee benefits and also take individual policies.

As long as they are in service of the company that is providing such benefits, they can claim from that policy, but when the service period is over, they can make a claim from their individual policies.
CUMULATIVE (NO-CLAIM) BONUS TO BE STANDARDIZED

IRDA has proposed that insurers provide complete clarity about no claim of bonus. In case a claim has not been made in a particular year, the no claim bonus will have to be rolled back at the rate at which it was offered or has to be made a part of the total sum insured after the premium has been charged to this additional cover.
JUSTIFICATION FOR INCREASE IN PREMIUM IF ANY

Customers will no longer be in for a nasty surprise when the time arrives for the renewal of their policies. IRDA has said that insurers can only hike premiums if they can justify it to the IRDA on the basis of the preceding years of claim experience (at least three years). They will also have to explain the rationale behind the hike in prices as well.

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FIFTEEN DAYS FREE LOOK IN PERIOD

The most radical change that IRDA suggests is the free 15 day look in period, wherein it provides an aspiring customer to keep the policy and study it for 15 days absolutely free of cost. If he is not convinced about the benefits of the policy, he will have the liberty to return the policy to the insurer after a period of 15 days.
http://www.stockmarketsreview.com/extras/health_insurance_companies_in_india_are_fuming_nonetheless_as_new_changes_proposed_by_irda_could_hurt_their_profitability_319047/

HC directs IRDA to issue guidelines on medical insurance claims

August 2, 2013 

The Bombay High court on Friday directed the Insurance Regulator and Development Authority (IRDA) to issue guidelines to Insurance companies to come out with a pre-packaged compensation for 42 ailments covered under medical insurance on the basis of the sum insured and on the type of the hospital.

A bench of Chief Justice Mohit Shah and Justice M. S. Sancklecha gave the direction to IRDA to include such guidelines in the regulations framed by it four months ago.

The court observed “IRDA has only given powers to the insurance companies to settle claims.”

The Court asked IRDA to come out with such guidelines within four weeks. Besides, these guidelines have to be put up on the insurance company website so that the insured and the Third party Administrator (TPA) would get a fair idea of how much they are entitled for, the bench said.

These directions were given during the hearing of a PIL filed by social worker Gaurang Damani detailing hardships faced by Mediclaim policy holders.

Petitioner Gaurang Damani submitted that “there have been instances where patients, who have undergone the same kind of treatment at the same hospital, have been disbursed different insurance amounts. If pre-packaging is made available, then the insured can also choose the kind of hospital in which he wants to be treated,” he contended.

The court has also directed IRDA to include in the guidelines a clear message that TPAs can only recommend a claim amount but cannot settle it.

“It is the insurance company who is to settle the claim and for that a detailed guideline should be issued in the regulations which have been issued by the IRDA four months back governing the insurance companies while settling claims.

Mr. Damani said that as per the IRDA affidavit filed last year, there were six lakh health insurance claims pending which amounted to around Rs. 1,200 crore. He added this is because the TPAs were doing the settlement and not the insurance companies.

The court has adjourned the hearing to next month.

http://www.thehindu.com/business/Industry/hc-directs-irda-to-issue-guidelines-on-medical-insurance-claims/article4982146.ece