Last October when Charanjit Kaur (63) was diagnosed with pancreatitis and the hospital handed her a bill of Rs 2.57 lakh, Aman Jubbal, her daughter, thanked her stars that her father had a group health insurance
of Rs 1.8 lakh which also covered his spouse. Since then, Charanjit has been hospitalised thrice and each time Jubbal successfully took the cashless claim route to pay the hefty bills. "The procedures were quick, easy and convenient and we had no trouble in increasing the cover as well," says Jubbal. But Jubbal's story is a rare one. Not everybody is lucky enough to avail the facility without hassles.POLICY CHANGES
Last July, in a bid to contain losses due to inflated medical claims from hospitals, the state-run health insurers decided to standardise rates for around 42 medical procedures across various categories of hospitals for settling cashless claims. Consequently, General Insurance Public Sector Association (GIPSA), a group of four public-sector general insurance companies, New India Assurance Company, United India Insurance Company, Oriental Insurance Company and National Insurance Company, restricted their cashless service only to hospitals that accepted these price bands and therefore agreed to join what they termed as their PPN (preferred provider network).
Amid this scuffle, the 5.49 crore health insurance consumers suffered the most. A public interest litigation (PIL) was recently filed against the decision of the public sector insurance companies, in the Bombay High Court. "In the absence of the cashless facility, when a consumer goes for treatment, he ends up paying an amount to the hospital or the nursing home, which may be subsequently disallowed wholly or partly by the third party administrator (TPA), based on various reasons," states the PIL filed by Gaurang Damani, founder of Karmayogi Pratishthan, a nongovernmental organisation.FOR THE LARGER GOOD
However, the insurers who have been trying to straighten out the system believe the PPN is a step that would benefit the customers in the long run. "There is a misunderstanding that the PPN system is designed simply to bring down our expenses. The main objective was actually to rationalise the entire cost structure of healthcare providers, not just from the perspective of the insurers, but for the benefit of the customers as well.
Standardised packaged rates would ensure that the customer is not overcharged and the sum assured in the policy is utilised judiciously," says AK Singhal, CEO, GIPSA. Malti Jaswal, CEO of E-Meditek (TPA) services concurs and points out that higher claims from hospitals will mean higher premiums for the customers in the future. "So, what insurance companies are doing is collective bargaining for the good of both customers and the insurers," adds Jaswal.
Though private players continue to settle claims through the cashless mode, they back GIPSA. "We continue to offer customers access to over 4,000 hospitals on a cashless settlement mode. However, the fact remains that the root cause which led to the action by PSU insurers is a relevant one, is one which is a matter of concern for the industry as a whole - and needs to be addressed by the constituents of the healthcare industry," says Ritesh Kumar, managing director and chief executive officer, HDFC ERGO General Insurance CompanyKNOTS IN THE NETWORK
After being at loggerheads with GIPSA, for the first few weeks, the majority of hospitals have now come on board. Presently, a total of 560 hospitals have agreed to join the PPN including reputed names such as Jaslok hospital in Mumbai and Sir Ganga Ram Hospital in New Delhi. The GIPSA members have, however, not been able to strike agreements with top hospital chains such as Fortis, Max Healthcare and Apollo. The point of contention remains the standardisation of rates.
"GIPSA wanted similar rates across all hospitals, without comparing the quality of infrastructure, doctors, services, accreditation etc. available at various hospitals. We find it difficult to accept arbitrary rates which are going to be the same across all categories of hospitals," argues Sunil Kapur, chief of sales, Fortis Healthcare. Kapur is also wary of the manner in which the change in policy was announced. "No time was given to the providers, no negotiations were done and suddenly the cashless facility was stopped," he adds.
However, Singhal says the dialogue is still on and GIPSA hopes to break the deadlock soon. Jaswal from E-Meditek, which is also a party in the process of negotiating rates with these hospitals, says it is a matter of time before they all come on board.THE WAY FORWARD
Some private insurers, such as Bajaj Allianz, Max Bupa and ICICI Lombard, do not rely on TPAs to settle claims. They administer the settlement of claims inhouse. Now, public sector insurers too are planning to form a joint venture with a TPA that will administer the claims of only GIPSA members. The arrangement, expected to be in place by June this year, will hopefully woo back the hospitals that have chosen to stay outside the PPN.
"Individual TPAs do not have a bandwidth and there is no strong TPA association that can speak for the industry. A dedicated TPA for PSU insurance companies might be in a position to do so," says Kapur. GIPSA sees the customer and the industry gaining from its new system. "The purpose behind setting up our own TPA is to create a benchmark for customer service so that we increase the competition. We have no complaints against existing TPAs. They are providing very good service. Our wish is that they become better," says Singhal.
Singhal also plans to roll out the rate-standardisation exercise in cities such as Kolkata, Chandigarh, Hyderabad and Ahmedabad after the four metros. Meanwhile, currently, what does the consumer do if he is stuck with a health insurance policy from a GIPSA member in a hospital that is not part of the PPN? According to Jaswal, reimbursement route is not as tough as customers make it out to be.
AVAILING SERVICES FROM NON-NETWORK HOSPITALS
Policyholder should intimate the TPA within the period stipulated
Make full payment to the hospital after completion of treatment
Submit policy copy, ID card, payment receipts, discharge summary, signed claims form & investigation reportsment to the TPA