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

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.

IRDA relaxes health insurance norms

IRDA has made a few key amendments in health insurance norms. It has eased criteria for hospitals to qualify for tie-ups with insurance companies.

The new amendment allows a hospital which is registered with the local authorities under Clinical Establishments (Registration and Regulation) Act, 2010 to tie-up with insurance companies. In addition, any hospital meeting these minimum criteria will also qualify:

- at least 10 in-patients beds in towns having population of less than 10 lakh and15 in-patients beds in other places,

- maintain the daily record of patients,

- facility of qualified nursing staff facility and medical practitioner in-charge round the clock and

- fully equipped operation theatre.

Nisreen Mamaji of Moneyworks Financial Advisers says“Allowing hospitals registered with the local authority to tie-up with insurance companies will help cut down the claim settlement time and also provide cashless benefits to policyholders. Earlier, policyholders had to pay cash at the time of treatment and later submit necessary documents to settle their claims which often took 3 to 4 weeks.”

However, Nilesh Shah, a Coimbatore based Financial Adviser, is skeptical about this amendment. He says health insurance penetration could only be increased if uniform tariff card is applied for all hospitals across the nation.

The insurance regulator has recognised registered homeopathic practitioners as medical practitioners.

IRDA has made changes in some standard definition of commonly used terminology of health insurance regulation. Now, the definition of portability is called ‘switching from one insurer to another’. However, switching from one plan to another of the same insurer has been omitted in the new definition.

Nisreen said “Switching facility from one plan to another plan is already available. Hence, excluding it from new definition doesn’t create any difference in the health insurance segment.”

Now IRDA has allowed any number of lawful terminations of pregnancy throughout the policy life. Earlier only two lawful terminations were allowed. Pre-natal and post-natal care have been excluded from the new definition of Maternity Expenses. Nisreen observes that exclusion of pre-natal and post-natal care from the new definition would be a setback as it may prove expensive for policyholders.

IRDA has added adopted children under its ‘new born baby’ definition. The regulator has also added full recovery clause in the new definition of acute condition. Acute condition is a disease, illness or injury in which medical treatment is immediately needed.

Deductible, which is cost-sharing requirement under a health insurance policy, has been left to insurers to decide whether the deductible is applicable per year, per life or per event.

 

http://www.cafemutual.com/News/IRDA-relaxes-health-insurance-norms-~2622~New~Insurance~25

STANDARDIZATION IN HEALTH INSURANCE: STREAMLINED BUSINESS & SATISFIED CONSUMERS!

 

Health Insurance continues to be one of the most dynamic and fast evolving sectors of the Indian insurance industry. Gross written premiums by insurance companies has increased from Rs.17565 cr in FY’ 2005 to Rs.59898 cr in FY’2012 showing a very healthy 19% CAGR growth. The industry has shown significant improvement in operational parameters even as claims ratios continue to remain high. However, the growth is fraught with numerous challenges including efficiency, affordability and accessibility of health insurance. The efficiency in the health insurance system is also plagued by mistrust between providers and insurers due to non-standardized practices and formats in an evolving industry. Standardization therefore is critical to enhance quality delivery of health insurance, encourage innovation and greater penetration of health insurance in the country.

Health Insurance Guidelines 2013

The IRDA recently notified the health insurance guidelines 2013 to standardize health insurance in the country. The regulator has mentioned that the guidelines are meant to reduce ambiguity and enable all stakeholders to provide better services and enable customers to interact more effectively with insurers, third-party administrators and providers. The guidelines includes various facets of standardization including definitions of critical illnesses, definitions of commonly used insurance terms, list of excluded items in hospitalization indemnity policies, billing formats, discharge summary and standard contracts between TPA, insurers and hospitals. Undoubtedly, this represents a very important milestone in ushering standardization in the health insurance sector. Let’s dwell on each of these facets to appreciate the importance of this initiative.

The Guidelines aim to reduce the existing ambiguity between the insurer/reinsurer, provider and consumer due to varied critical illnesses definitions. The differences in the definitions of Critical Illnesses adopted by the different insurers have created confusion in the minds of consumers wherein products are difficult to compare and the industry especially at the time when insurers and re-insurers have to arrive at a point where lump sum payment is made. The availability of standard definitions would now ensure better comparability and uniformity in the understanding of critical illness definitions.

Another grey area that has been addressed is the list of excluded items.  As there is has been no detailed listing of such excluded expenses, and the interpretation of these exclusions is highly varied across different payers in the industry, many a times various items under the claims filed by hospital providers or individual policyholders are repudiated by the insurers but are disputed by the claimants. This is, thus, one major cause of acrimony between Insurance Companies and healthcare providers and also puts the consumer in inconvenience as out of pocket expenses goes up. The excluded items list driven by a  consensus between all the stakeholders of the industry and a uniform understanding of such ‘exclusions’ would be the key for better understanding of policy conditions by the policyholders and hospitals, which would in turn facilitate speedier roll out of health insurance in the country.

Standardizing billing formats would enable mapping of hospital information systems to specific data requirements of the Insurance companies for faster claim processing and enhanced analysis of data.

This would also facilitate electronic transmission of provider bills to the payers for processing and payment. The standardized format would now be part of the standard contract between insurers/TPA and the providers. Similarly, varied Discharge Summary format specific to payers often leads to delay in processing claims as requests have to be sent to providers to provide additional information. The standardized discharge summary would now be used across providers for benefit of all stakeholders and facilitate processing of claims at the payer end. The relevant information would integrate seamlessly with standard claim form and provider bills.

The guidelines also specify the minimum standard clauses of the service level agreement entered between the Insurer and the TPA as well as agreement between the healthcare provider and the Insurer/TPA. A skeletal framework for the contract would bring uniformity, more clarity about the service standards and minimize the chances of disputes over interpretation. The document would be instrumental in streamlining other standard processes and documents like pre-authorization form, discharge summary form, bill formats, etc.

The release of the health insurance guidelines also marks a new journey for the FICCI health insurance advisory group which would now look at new domain areas in health insurance including combating health insurance fraud, product innovation, data analytics and promoting quality in healthcare through health insurance. The group would continue to work towards realizing an ideal universe of health insurance business with satisfied customer at its core, greater penetration of health insurance products and affordable quality healthcare for the masses.

There are other facets of standardization in the IRDA guidelines including the Standard Insurance Terms and Standard Pre-authorization and Claim form. Insurance terms continue to remain jargons for the laymen. Terms notified in the guidelines would reduce ambiguity, enable all stakeholders to provide better services and enable customers to interact more effectively with insurers, TPAs and providers.  A common industry wide pre-authorization and claim form will significantly streamline processes at all stages. This will also enhance the ability of providers to obtain a timely prior authorization. By implementing it in an optical character recognition (OCR) format, the ability to transfer data from a handwritten paper based form to IT systems has been enhanced thus reducing the data entry issues for TPAs and insurers. Every company shall attach set of claim forms along with policy terms and conditions to the policyholder.

IRDA allows banks to act as insurance brokers

Insurance Regulatory and Development Authority (IRDA) has allowed banks to act as brokers and sell products of more than one insurer so as to increase the penetration of the sector across the country.

There is no capital requirement for insurance broking business carried out by banks, according to IRDA (Licensing of Banks as Insurance Brokers) Regulations, 2013.

To qualify for the license, each bank will have to have the principal officer, an officer of general manager or equivalent category, who is appointed exclusively to carry out the functions of an insurance broker.

The license, once issued, will be valid for three years from the date of issue, it said, adding that the renewal of license can be applied 30 days before its expiry.

Every insurance broker will, before the commencement of the business, deposit and keep deposits with any scheduled bank as sum of Rs 50 lakh, it said.

The business of the insurance broker will have to be carried out in the such a manner that not more than 50 percent of the premium emanates from any one client.

“Not more than 25 per cent of insurance handled by the insurance broker in any financial year is placed with the insurance company within the promoter group, separately for life and general insurance business” IRDA said.

It also said the calculation of non-Indian interest in the applicant company shall be as per the limits applicable to the banking sector as decided from time to time by the government or the Reserve Bank.

While The Reserve Bank of India’s (RBI) approval is required for banks to become brokers, IRDA is of the opinion that in case of any dispute arising out of insurance transactions, its jurisdiction should prevail. It added that the laws applicable to insurance contracts shall be enforced and information in this regard shall be furnished to the RBI.