This is really an excellent piece of news. IRDA, continuing its efforts to protect consumer interests, has announced its decision to issue detailed rules on Claims settlement for Health Insurance Companies. The first draft is expected in April 30, 2012.
This announcement is following a recent Bombay High Court order asking IRDA to draft regulations bringing in claim settlement rules for Insurance Companies.
Guarang Damani, an insurance activist, had filed a public interest litigation in February, 2011 against IRDA which said “there are a great deal of inconsistencies and violations in the health insurance industry, which are directly detrimental to the interests, health and financial well being of Crores of Indian consumers.” The fight between the hospitals and insurers and their third party administrators (TPAs) should not impact consumers, it said.
There is another sore point with health insurance claimants, that while Insurance Companies were rejecting claims on mere technical grounds of delayed claim submission or no intimation, as per policy wordings; they were not following the timeline in the same policy wording, regarding settlement of claims. Most policy wordings of Health Insurance products have a timeline of settling claims in 21 days post submission of the documents, which is hardly ever met.
Most Claims are delayed by repeated demand of additional documents. With Medimanage's proprietary claim processes we are able to save face with the customer many times, by foreseeing documents that could be demanded and work simultaneously with the customer to get them ready proactively, before these are asked for, hence improving the turn-around time for claim settlement. At the same time, by our experience we can imagine the misery of an average individual customer stuck without any help, on a claim, with a TPA or Insurance Company. Our guestimate says that an average claim would take anywhere close to 45-60 days, almost double of the promise made in the policy wordings.
We expect specific rules on following pain points:
1. Insurance company should request all additional documents post a scrutiny of claim in one go. In current situation, we observe, as the file moves from one process to another, there are documents demanded, one by one, this causes too much of back-n-forth. Customers have to visit hospitals repeatedly depending on how many times, information or documents are demanded. This is a huge pain point for customers.
2. Enforcing timelines, with penalty clause for
a. Seeking additional information from the customer.
b. Settling claims.
3. Bringing more transparency in communications from TPAs/Insurance Companies regarding deductions made in claims, as well as reason for denial.
4. Standardization of Claim Forms, including Cashless request forms across Insurance Companies.
5. Compulsorily updating customers on change of TPA as well as addition and deletion of hospitals from cashless network.
Watch this space for more updates.