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IRDA plans new health insurance rules

On Monday, J Harinarayan, Chairman, IRDA said “The mechanisms are being put in place to improve efficiency in health insurance and administration. Expert committees of industry bodies like CII and FICCI have recommended measures including uniform claim forms, re-authorization. We are also looking into aspects related to billing,” he said. As of July 1 328 hospitals were in the network for cashless facility across four cities namely Mumbai, Delhi, Chennai and Bengaluru. However, they withdrew from the same citing steep charges.

“They (hospitals) have renegotiated rates and as per the last count, over 390 have signed up with the partnership network,” he said.

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Experts from Medimanage.com give their opinion:

Sudhir Sarnobat:

Sudhir Sarnobat from Medimanage.com

The initiatives like Uniform Claims Form, Uniform Pre-authorisation form, though look very simple, will add greatly to simplicity of administration.

Apart from the major reforms like cashless hospitalisation, premium rationalisation, the administrative reforms like this would hugely benefit the customers.

Cashless facility heal thyself

Unfortunately, despite the growth and their leading market share, state-owned insurers have not been able to give focused attention to health insurance through the creation of a health insurance division. The grapevine has it that the current imbroglio over cashless is partly because of differences between two senior executives entrusted with health insurance in a leading public sector firm. Instead of arriving at a middle of the road solution, such as asking for co-pay or segmenting their policies, PSU insurers have chosen to renege on their contracts with policyholders and withdraw cashless facilities with most of the tertiary-care hospitals. The result of this decision has been a frenzied round of finger pointing which makes it almost impossible to state the problem.

Insurers have alleged that hospitals are padding up their bills for policyholders. This is in sharp contrast to the practice in markets, such as the US, where insurers are able to bargain for better discounts. They have therefore decided to flex their muscles and have stayed away from the negotiating table, despite feelers from hospitals.

Third-party administrators (TPAs) have all along been having fights with hospitals over the need for tests and billings. This has resulted in TPAs being blacklisted from time to time. Hospitals, on their part, accuse TPAs of interference in medical decisions, needless harassment caused by their verification processes and delay in receiving reimbursement. “The days of naadi shastra are over. Today, we can decide on treatment only after conducting tests. TPAs cannot apply the wisdom of hindsight and tell us that a particular test was unnecessary,” says a medical director of a leading hospital in South Mumbai, defending the medical practices of using the process of elimination through various tests.

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Experts from Medimanage.com give their opinion:

Sudhir Sarnobat:

Sudhir Sarnobat from Medimanage.com

Cashless hospitalisation is not a product in itself but an extended service for a core product of indemnity against hospitalisation expenses. However, this has been an attractive product feature & has helped in popularisation of Mediclaim in Urban India. However, this has been abused by some hospitals most of the time or most of the hospitals some of the times. Though the insurers are trying to bring in underwriting discipline to improve claims performance, they also are trying to make the consumption efficient & hence, this upheaval that we are witnessing in the market.

Though the hospitals (and doctors) may not like interference in their treatment, some amount of questioning & control will happen from the Insurers & TPAs. Doctors, being not habituated to such interference (In India, we treat them like God but abroad, they are always questioned & challenged) they feel threatened but with changing time, need to be open & educative.

Recently, we came across news in an online Publication, mydigitalfc.com

Health insurance policyholders may face problems as I-T dept seals TPA accounts

Several health insurance policyholders may face problems in getting cashless hospitalisation as the income tax department has sealed accounts of several third party intermediaries (TPAs) for non-payment of tax deducted at source (TDS).

Industry officials say TPAs whose accounts have been sealed are Mumbai headquartered Pa­ramount Health Services, United Healthcare Services, Dedic­ated Health Care Ser­vices and Health India TPA.

Industry sources said sealing of accounts means that the TPA cannot render its services till the issue is settled. TPAs are inte­rm­ediar­ies between the ins­ured, ho­spital and the insu­rance fi­rm and facilitate hospitali­sation of the insu­red by pay­ing the hospital from fu­nds allocated to them by insurance firms.

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Experts from Medimanage.com give their opinion:

Sudhir Sarnobat:

Sudhir Sarnobat from Medimanage.com

This is purely the area of failure to fulfil the obligation of deducting the TDS from the payments made to Hospital.

Though the insurance claims pay-outs to individuals are not treated as income, the pay-outs to hospital are treated as income by the hospital & the TDS should have been applied. This was not done by the TPAs & hence, the Income Tax department has taken this action.

As the TPAs in South have been able to manage a Stay on the order, there is a precedent & the issue should get resolved without any major disruptions. Also as IRDA (which regulates TPAs) & Income Tax Dept. both report to same ministry, an amicable solution can be identified to ensure that policy holder is not hassled unnecessarily.

 
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