Recently, we came across news of a judgement in an online Publication, news.yahoo.com
New Delhi, June 13 (PTI) Mediclaim policyholders, who are not satisfied with the service of their existing service providers, will be able to switch to another insurer soon without any change in the premium outgo. However, this facility will be available to those policyholders who are insured for a sum of Rs 1 lakh and above, to begin with
The policyholders will be able to switch their health insurance providers with the same benefits retained once they have bought this cover. At present, a policyholder is given health cover for a year and the same has to be renewed every year.
To read the full news, click here
Experts from Medimanage.com give their opinion:
Don’t see much value in this.
Pl don’t get me wrong. I see huge value in portability. It’s just that I don’t see much value in the Council contemplated portability.
Even as of now, quite a few private players offer much wider portability – due to business considerations, of course. It is easier to convert the converted. Read, it is easier to poach on PSU health policy holders than reach out and cover the uncovered masses. And if you want someone who has a PSU health policy to migrate to you during health insurance renewal, you need to have portability.
The key words are ‘widen the cover’. Will the widened cover be wide enough to match the wide open portability existing with private players now? My serious doubts on this are validated by a later set of key words ‘accumulated bonus is not carried forward’. Somehow every time I read it, I read it as ‘even accumulated bonus is not carried forward’ though the word even is not physically there. I would believe carrying the bonus forward is a minimum portability requirement.
The concept of guaranteed minimum covers is being carried in by the Westerly winds. What lands on Mother Earth and what remains in the winds needs to be seen.
This is a good news for all those Mediclaim members who are not happy with the services of their current company. There could be broadly three reasons why one would like to shift a policy.
The portability would help the consumers but the rules need to be clearer. We also believe that like Terrorism Pool, a portability pool should also be set up & the qualifying cases should be paid from such pool than by the insurer which would bring in better consumer orientation & reliability.
Recently, we came across news of a judgement in a leading online Publication, Zeenews.com
New Delhi: The National Consumer Commission has upheld the rejection of a Mediclaim of person, who suffered a heart attack within a week of taking an insurance policy, saying he failed to disclose the past history of the disease to the company. "It is well settled that principle of insurance is fundamental to utmost good faith which must be observed by the contracting parties and good faith forbids either party from non-disclosure of the fact which the parties know," the Commission said.
To read full news, click here
Whilst on our friend Chandra I will refrain from commenting for want of adequate information on facts of the case, purely from the legal perspective, I actually see the silver lining behind this apparently dark – not in favour of consumer – cloud. Read decision.
Insurers in their policies had been trying to disown liability for claims traceable to preexisting conditions, irrespective of whether the insured person was aware of such conditions are not. In the subject judgment, however, the Ld. Commission’s surmise that Chandra ought to have known about his heart condition stems more from the legal position of ‘res ipsa loquitar’ (In the normal course) than from a ‘reasonably expected to know’ stand point.
Let’s talk English and not Law. In simple English, the difference is this:
Through their policy wordings, insurers attempt to disown liability for claims traceable to any pre-existing condition that the insured person is reasonably expected to know. Imagine I had been having some symptoms of hypertension but had not recognized them to be such symptoms – In its strict application, the pre-existing condition exclusion in the policy will render me ineligible for a claim. ‘Cause I was reasonably expected to recognize these symptoms to be indicative of Hypertension. This is the ‘reasonably expected to know’ stand point.
The judgment however evolves around Chandra suffering heart attack within a week of taking the policy. The Ld. Commission has taken specific reference to this occurrence happening within a week - "It would be too much of a coincidence to argue that within a week of the complainant taking the policy, he had a sudden heart attack and from the available records, we cannot but hold that he had a past history which was not disclosed for reasons best known to him," the Commission said. This judgment will therefore not become an authority (an authority is a previous judgment relying on which a current case can be decided) in a case where, say, a Surya suffers a heart attack in the eleventh month of his first policy.
The judgment also specifically says "It is well settled that principle of insurance is fundamental to utmost good faith which must be observed by the contracting parties and good faith forbids either party from non-disclosure of the fact which the parties know," the Commission said. (Highlighting mine). So, the insured knowing and not disclosing is what can result in insurer rescinding liability, not merely the insured being reasonably expected to know.
Significantly again, the Ld. Commission, in its wisdom, has passed this judgment based on the basic principle of insurance (utmost good faith), and not a reference to the exclusion condition in the policy contract.
So this judgment does not uphold insurer’s self proclaimed ‘right’ to disown liability on non-disclosure of what the insured person does not know or was merely reasonably expected to know.
Thank Lord Dharma there still are judges who give speaking judgments!
This is an interesting decision under Mediclaim policy where the judgement is given against the health insurance buyer.
Many of the insurance agents misguide the buyers & push them to Buy health insurance policy so that they can get a claim.
They believe that Health Insurance Company will overlook this & they can get their claim by managing the officials at TPA or Insurer or by suppressing the facts while getting the hospitalisation done.
Health insurance is not a lottery where people can pay a premium of Rs. 5000 and get guaranteed return of 2-3 Lakhs.
We believe that with this judgement Mediclaim buyers would not wait till the illness strikes them to buy health insurance policy. They would buy it earlier to gain peace of mind which is essential principle of the insurance.
In the high-performance-high-aspirations age we live, more and more Indians live as nuclear families in distant cities away from their own parents.
Long gone are the days, when Dada-Dadis or even Nana-Nanis used to be the doting baby care guides. In a way, Baby Care today has become a case of trial-n-error internet browsing or picking up a famous book recommended by your nearest book shop.
What better a gift for first time mothers, on Mother’s Day, than a well-researched simple guide to manage their most valuable little ones?
The Book – The Great Indian Guide for Baby Care was launched on the eve of Mother’s Day (8th May) by renowned Pediatric Cardiologist Dr. Abdul Rasheed of Asian Heart Institute Mumbai.
With contributions from leading pediatrics and gynecologists, the well researched eBook has been compiled in lucid language keeping in mind the challenges of today’s young mother. The eBook uniquely blends global best practices in Infant Baby Healthcare with a rich Indian flavor, perfect for the Indian Household.
The 109 page book is produced by www.medimanage.com; a free web-based Preventive Health Magazine. “We found that most books available in the market today are western, outdated or too thick for today’s tired mommies to go through. That’s when our online magazine thought of writing a simple eBook” Says Mahavir Chopra, Head – eBusiness, Medimanage.com
The eBook, currently available in English, can be personalized as a gift and downloaded from the website at the following link
http://www.medimanage.com/e-book-sign-in.aspx for free.
Medimanage.com (http://www.medimanage.com) is a free India-centric online health magazine focused on day-to-day preventive health. The website provides lucid original content on 9 important aspects of Preventive Health, right from Weight and Diet to Parents’ Health and Health Insurance. The website was launched in October last year, by Medimanage Health Services Pvt. Ltd. – A Preventive Health Management Company headquartered in Mumbai.
“The articles in the website as much as the chapters in this book are written by professional writers often in layman’s language or even in story form, so that they appeal to readers and encourage a healthy lifestyle.” – Says KS Sankar –Editor-in-Chief of the Website.
Health Insurance being the corner stone of growth for the Insurance Industry; specially the Non-Life side, has been in the news. Huge growth numbers have been regular headlines in all kinds of media. Though Mediclaim is the most important growth driver and prime focus for the Insurance Industry, claims keep soaring taller and taller than the premiums in the PPT presentations of Insurance Companies.
Recently one has noticed an interesting rise in the press articles targetting the TPAs, their disputes with customers and their general misgivings with headlines such as Public Sector Insurance Companies to rationalize TPAs, TPAs to be audited for customer service, TPAs payments to Hospitals to be taxed, Doctors in city blacklist TPAs over fee row, and more!
TPAs seem to now bring a picture of a monster, in the eyes of the consumer and general public, who is the root cause of all disputes and problems and who must die or atleast be shut down.
Couple this with the Leading Insurance companies terminating contracts with TPAs and started their own in-house claims management cells. For instant last year, ICICI – the largest private insurance company, sacked its long running TPA, to start its own in-house claims management department. In fact not having a TPA (read having an in-house TPA) is the trending USP seen in product brochures, nowadays.
And now with the Consumers suing TPAs, Healthcare Providers blacklisting them along with Insurance Companies Sacking them one question is coming to everyone's minds- is this the end of the road for TPAs?
We contacted some experienced members/veterans from the Indian Insurance Industry to throw some light on the future of TPAs and Claims Servicing in India:
Dr. Abhitabh Gupta:
A Doctor and Radiologist by qualification, Dr. Abhitabh Gupta is a veteran in the Health Insurance Industry. He has designed many innovative Health Insurance products for the Indian Market and is a regular faculty at the National Insurance Academy. Currently Dr. Gupta is the CEO of Paramount Health Services, a leading TPA.
Mr. Sudhir Sarnobat is the Director of Medimanage Insurance Broking – the only dedicated health insurance broking company in India. A seasoned, Healthcare Professional, Sudhir has been closely studying the Health Insurance Market and its operations for years now.
Mr. Sankar has over 30 years of experience in the insurance domain. To his credit, he has been singularly responsible for bringing to fore innovative products into the insurance market. His perspective below, also comes from his experience of being a part of designing various new arrangements in the Health Insurance Industry in India, including the arrangement of the TPA, the topic in question.
Here goes an interesting collage of interesting standpoints, we received for our questions which helped us get clarity and understand the TPA scene better, for today and tomorrow!
Q1. There are regular stories in press on how Insurance Companies and the Regulator focusing on regulating the facilitator to control the claims ratio? What is your take? Is it going overboard?
Abhitabh Gupta: Let’s look at where all this originated. Health insurance used to be a small portfolio and was also a neglected one when TPAs were introduced. It was successfully used as an entry point for other lines of businesses by most of the insurers, especially in the private sector. Portfolio approach was the mantra of those days and health insurance was only a tool. Growth of the company was measured by numbers and top line especially public sector. Since the health portfolio was very small, therefore the losses in it were always neglected. The Health business was picked up at dirt cheap rates , due to portfolio approach. Some mid size policies were even underwritten by top insurers at Re. 1/-, Service levels were talk of the town when private sector insurance companies came up. Business calls were often taken and TPAs were asked to pay the full claims amount in spite of losses while Insurance Companies were compensated by other premiums. The health product was never adequately priced and did not take into account the inflation in health care and technological advances. There were no scientific underwriting guidelines or principles, both for individual and group businesses. Agents and customers utilized this to their benefit. TPAs did not have access to proper past data or proposal forms which were in any case incomplete.
The scenario has changed after de-tariffing. Health, forms almost 25 percent of overall business of insurance companies, which in few years will go as high as fifty percent. The focus has therefore shifted to service, the TPAs and claim control is the new success mantra for insurance companies. Not all TPAs were knowledgeable and therefore partly their inability to create an effective network and control losses has added up to all this.
Sudhir Sarnobat: In the current context , the absence of subsidy and inability to up premiums in the buyers market scenario, has increasingly resulted in Insurers having high claims ratio on Mediclaim. Focus on claims containment was bound to happen, but holding the TPA alone responsible for this would not be correct. The claims ratio is high because there are no clear-cut benefit rationalization wordings in the policy documents of most of the insurers which limits the scope of TPA. Also the major party in this transaction is the Hospital which is not regulated at all. Even for insurance purpose, there are no guidelines set for them.
KS Sankar: I do not see any real attempt by the Regulator regulating the facilitator to control the claims ratio. The Regulator, being a Government Body, if really keen, can certainly impress the Ministry to regulate the Hospitals. Yes, Insurers have started breathing down heavily on the facilitators. What the insurers do here varies widely from one insurance executive to another. The feet-firmly-on-mother-earth types are rightly seeking facilitators to come up with more and more scientific analysis of the claims data as a tool to control the claims ratio. My take is, facilitators can do a lot here but have been doing scarce little. Unfortunately, there are also insurance executives who rhetorically keep proclaiming the facilitator needs to control claims – as if the facilitator has a magic wand. Come the month when the renewal is around the corner, this very insurance executive would want the facilitator to pay all claims and sundry. My take here is, such insurance executives have to come out of their Utopia and in any case, arrest their pendulum swings.
Q2. Is it true that, originally the TPAs were required to rationalize the treatment costs? Why do you think they failed in achieving this?
Abhitabh Gupta: Yes, originally the TPAs were required to rationalize costs. In fact several attempts were made by GIPSA (an association of all Public Sector Insurance Companies) and several insurance companies but the TPAs failed due to several issues including lack of clarity on several fronts, lack of unity amongst insurers, no regulatory body of healthcare providers to talk to, TPAs not being adequately compensated vis-à-vis the services that were expected, several TPAs having their own provider chain etc.
Sudhir Sarnobat: The original agreement with TPA is for Claims Settlement only (as the claim settlement mechanism by PSU Insurers was inefficient.) To add value, all, these TPAs were asked to throw in Value Added Service, which turned out to be Cashless Treatment for patients. If you look at the agreement between TPA & Insurer, it talks about Cashless Treatment & efficient claims management only.
KS Sankar: It is true that originally the TPAs were required to rationalize the treatment costs. You know I am privileged to have been hands on associated with the evolution of the concept of TPAs in India. We (meaning insurers – past tense for me) were not expecting the TPAs to mount the wild horse in just a day or two. The road map laid out was (at least in my opinion) pretty scientific. DBMS would become easier with TPAs since all claims data will be pooled and shared. Scientific data mining will empower TPAs to legitimately position and establish instances of hospitals misusing insurance. Without TPAs, the awareness of Hospitals misusing insurance was like Australia – everybody knew it was there, but nobody bothered beyond lamenting about it. The body of TPAs was expected to provide enough data based irrefutable inputs and logic with which insurance industry could go to GOI and push MOF to open the Nelson’s eyes of MOH. You can’t go to the Government talking about what you feel or infer or even know. You need to go to them with data and details that clearly establish what you say. The body of TPAs were expected to provide this teeth to the insurers, and I would say, they have miserably failed. The simplest of the simple things – when claims data was thinly distributed among the 10000+ insurance offices, same hospital charging differently for same procedure could not get noticed. Trust me, unless you and I push them to do it, no TPA by default will notice this either, despite the data having got pooled!
Why the failure? Merrily, all to blame. The customer is still not educated to know insurance is an indemnity and not a bank deposit. Not even that if overcharged for one hospitalization, she ends up with a lower residual for the remaining policy period.
The insurance company, by paying disproportionately low rates of fees to TPAs. Pay peanuts, get monkeys. Add to this the pendulum swing the insurers themselves indulge in that I have referred to above – what better can you expect the monkey to do?
The body of TPAs whose entire concentration is only on hunting for new accounts and thus increasing their revenues at any cost than emerging as a professional body. Turf war has not alone made the TPA market place murkier, but has also created such close chestedness with data that the fundamental expectation of a robust DBMS has itself gone for a toss.
Q3. Insurance Companies haven’t lobbied enough to get Hospitals regulated through the Government. Regulation on TPA, without regulation on Health Providers is almost futile. Comment.
Abhitabh Gupta: I agree. However few things can be still managed. Create a smaller preferred network of good hospitals. TPAs should capture more data which can establish quality parameters at a given hospital. I think insurers and TPAs should agree on reducing their network and do preferential pricing
Sudhir Sarnobat: The revenue generated for Hospital Industry through insurance is less than 15% of their total turnover & hence majority patients are “Self-Pay” customers. Such a scenario, does not allow TPAs to enforce regulation on Hospitals. Also the self-purchased insurance penetration is high only in Urban India & not rural. Govt.’s first priority today is Primary Healthcare & hence, the Hospital’s regulation is neglected. It’s high time that the Industry (Read the Regulator) pushes this issue with Health Ministry which is detrimental to good health of PSU insurers as well as consumer rights at the hospitals. In absence of regulations (or even guidelines), the hospital charges are going up without any improvement (or even responsibility) in quality. Shoddy services are being accepted by un-informed customers, without questioning the prices.
KS Sankar: Insurance Companies are justified in regulating the TPAs to empower themselves with scientific data base and analysis thereof. This is the sine qua non starting point for any lobbying to get Hospitals regulated through the Government.
Q4. Insurance Companies are increasingly sacking TPAs and taking up the claims processing in-house? As a customer’s representative, do you think customers are better off without TPAs in the long run?
Abhitabh Gupta: Insurance companies are not sacking TPAs, for service issues or better control, but for their own brand building. I am sure they are incurring higher costs than outsourcing it to TPAs. Lately we have seen many corporates smoving out of such insurers and opting for TPAs. I am hopeful that insurers will reverse their decision in due course. Individual companies will never be able to match the pricing ability of a TPA due to the lack of volumes and therefore also not being able to match bulk discounts offered to TPAs by providers
Sudhir Sarnobat: Claims settlement by Insurer is anti-consumer as we see adamant & irrational claims settlement by Insurers when the Underwriter & Claims Setter is same. This can even be dangerous for corporate customers as they will be held at ransom for outstanding claims when the company wants to move away from Insurer A to Insurer B. If there are issues with TPAs claims settlement, it’s because of the absence of clear-cut guidelines and no proper audit/checks on performance by TPAs. If you cut your finger, you don’t chop off your hand & hence, just because there are claims issues by TPA, abolishing entire TPA eco-system is not the solution. I believe that if Insurers are starting their own TPAs, it’s not for efficiency improvement (except for Bajaj Allianz who took the plunge of self-TPA very early, all other insurer’s TPA’s efficiency & service levels are almost pathetic) or love for customer satisfaction. It is emanating more from trying to control the consumer & his/her claims.
KS Sankar: TPAs are not being done away with – Insurance companies are becoming their own TPAs, that’s all. The advantages to the customer in terms of cashless hospitalization, single point claim settling contact, etc. have come to stay. Saying customers are better off without TPAs is like saying we were better off under the British Rule. Your generation might have been luckily spared this but in my times some old people by my standards used to make statements of this kind. My blood used to boil then, it does even now if someone says she is better off without a TPA. We (again in my past tense) took up this challenge and gave the option to the insuring public to take a policy with or without TPA services. For all the yelling and shouting about TPA inefficiency, when it came to the crux, trust me, there were no takers whatever for the non-TPA option, despite premium being lower by about 6%.
Q5. Healthcare Providers are black-listing TPAs for various reasons, specially payment or authorization delay
Abhitabh Gupta: There could be some TPAs who do not have adequate infrastructure which could lead to such an issue. Mostly these situations arise due to delay in payment by the insurance companies to TPAs.
Sudhir Sarnobat: Hospitals are giving a knee jerk reaction for an issue or problem, responsibility for which they need to own up too. The hospital industry, without any regulations, has failed to self-regulate themselves. The mal-practices, instances of charging high prices, medical negligence, ethical issues are not being tackled by the industry. Instead of creating better & workable understanding or framework, they are looking at banning the TPA. Its same like Insurer’s approach of dropping the TPAs. The payment delay is majorly due to delay for payment from Insurers to TPA as well as disputes in billings where the hospitals ask for authorization on basis of information provided during admission and the actual diagnosis/treatment is totally different. Most of the hospitals too have not invested enough time & resources in understanding the insurance policy wordings/requirements and hence, have issues on payments. Those few corporate hospitals who have made efforts of understanding the insurance policies, unfortunately use this knowledge to take advantage of the cashless facility.
KS Sankar: This was also expected to happen even while we were at the drawing board of the TPA model. It was expected TPAs will develop enough robustness to weather this storm in the tea cup. We expected what with the rate at which Hospitals are springing up, the vast majority, especially of the newer generation Hospitals will entertain TPAs. And this expectation has come true. Therefore, the storm kicked up by some of the Healthcare providers is only inside the tea cup. Having said this, the insurers need to take onus for two things – the expected rate at which more and more people were to have been brought under Health Insurance which will make life difficult for Hospitals not to recognize the TPAs (Insurer representatives) not being even neared, leave alone achieved. And avoidable inefficiencies in payments to healthcare providers that gave some healthcare providers the stick to beat the system with.
Q6. Is it the end of road for TPAs?
Abhitabh Gupta: TPAs are here to stay but they will have to change from their current role and graduate to actual medical management by implementing clinical protocols at network hospitals etc
Sudhir Sarnobat: Unless all the stake-holders (especially consumers & hospitals) do not take this issue up, TPAs will be favorite punching bag of members and will get all the blame. With more than 27 TPAs in system & PSUs who are not geared to handle claims on their own, I don’t think its end of the road for TPAs. But if the TPAs don’t take initiative, leverage the media to bring forward their point of view and clean-up their own house to improve efficiency, it will not be long before that Insurers will start looking for alternates and that would be like going from the Pan to the Fire.
KS Sankar: I hope it shall soon be the end of the road for TPAs as they exist today because I hope that would be the beginning of the customer friendly road for new generation professional TPAs. I expect quite a few TPA companies to die as I do expect the TPA concept to evolve and flourish.
Final take: The current scenario has put huge pressure on TPAs and their future. Tough times will definitely shake off the weak links in the TPA community. As always, constraints also brin in various opportunities, including opportunity to innovate and fight back as a leader.
Hope you got a good perspective of the whole story.
Keep coming back for more such insights.
Do write in your feedback to our posts in the comments section below.
We are proud to share how KS Sankar from Medimanage spoke about health insurance at HR Infotech Association's 14th Annual Event. HR Infotech is an association HR professionals in IT industry. It is a premier institution engaged in promoting HR practices in Indian IT sector. Mr. Sankar from Medimanage spoke on how health management is important for organisation and how managing health insurance will require managing health.
A society that does not care about its Senior Citizens is an ingrate society.But, alas, that is what our society is increasingly turning out to be, when it comes to providing them proper and adequate Health insurance cover.When a Senior Citizen seeks individual health insurance cover, across board, the insurance industry’s approach is only to make him/her feel unwelcome than welcome.
The industry starts from a premise of how to avoid providing cover, and would, at best, offer minimum and most restricted covers and ‘get away with it’. The underwriting ‘prudence’, concern for bottom line and adherence to rules, norms and processes that is generally thrown to winds when providing Group Health covers for Corporates suddenly come to the fore at their sharpest best.
If you want cover for the first time, it’s a ‘No, No’, which is probably fine because the right time to get under the health insurance umbrella is when you are young and healthy. But, even if you have been having a cover and you want to increase your Sum Insured to catch up with medical inflation, it’s still ‘No way’, if, for any unfortunate reason you have missed renewing your policy in time, you are back at the ‘No, No’ gate. You have approached the insurer for your renewal well in time and are seeking renewal for just the same Sum Insured as last year – no increase or whatever, yet, you may be called upon to pay a much heftier premium than you paid last year. You are trying to tell the insurer that you have had no claims last year. So what, you were already old, and you have become a year older, right! And, how hefty would the hike be is more a function of whether the concerned officer had a hefty breaker or a feisty fight at home that morning than any scientific common-across-board norm.
Things are no different even if you have been getting your insurance done alongwith the family of your son/daughter i.e. alongwith young enough members.
In short, the message is loud and clear – You, the Senior Citizen, are unwelcome on my books and even less welcome on my premises.
Is the case any different when it comes to customized health policies offered to corporate? No indeed. The first casualty when any corporate attempts to cut corners on the premium front is the cover for parents. The impact varies and settles anywhere between the corporate completely doing away with parental cover to sizeable co-pay on parental claims.Juxtapose this to another area that is a drain on the health insurance portfolio – maternity – and the irony hits you between the eyes. Technically, maternity is not even insurable. Afterall, insurance provides indemnity for pecuniary loss following occurrence of something unforeseen and fortuitous. Is maternity any more unforeseen or fortuitous? In today’s world, maternity is something that can be planned to the T (Or through the T, should I say). There are parents who had planned and structured maternity in such a way that the child is born exactly at the first nano-second of the new millennium!! The State, in its zest to promote the concept of healthy motherhood and healthy children, probably felt insurance is the best carrier of this social burden, but, instead of benefitting that section of the populace from whom this burden needs to be transferred and taken over, maternity cover is available only to the affording employees of corporates.. and has ended up being a retention tool than anything else. And therefore, the Sum Insured available for maternity cover only keeps going up !!!
My parents both are up there at the Lord’s feet, so, it is not the prospect of any impending personal pecuniary impact that triggers my writing this.. It is just the irony of the whole thing…
Should the grandchild be pampered and the grandparent be penalized??