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.

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

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.

“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

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