If it is a trip to the hospital, the last thing you want to worry about is payment details. Little wonder then that cashless deals are such a big hit with health insurance holders. No more digging out documents and doctors’ certificates when all you want is to take care of the patient. No endless visits to the insurance company’s office before they cough up the money you spent.
All this was made possible by third party administrators (TPAs). An intermediary between you and your insurance company, TPAs do all the running around for you — from zeroing in on the best hospital to paying the last of your bills. Easily the best thing to have happened to medical insurance in the past few years. Right? Maybe not.
Ask Ramakrishna Raja. A few months ago, this Chennai-based corporate executive had made a claim of Rs 25,000 for his wife’s gall bladder operation. Although he submitted all the relevant documents, the TPA made him run around for months before settling the claim. “I don’t need health insurance when I have to spend so much effort to get bona fide claims settled,” he fumes.
Raja’s experience shows that cashless isn’t worriless, at least not in every case. And in cases where settling claims isn’t an issue, there are other problems or limitations. As Noida-based Daleep Kumar discovered recently. He wanted a surgery to be performed by the doctor he knew at a government hospital, only to be told by the TPA that cashless claim facility isn’t offered for government hospitals.
So the TPA network can also limit your choice of hospitals to the ones that are part of their panel. If your doctor practises in a hospital not covered by the TPA, you have to choose between trust, hassle-free and cashless payments. Then there are cost issues. Hospitals generally charge more for treatment covered by a health insurance than they would for the same treatment if it wasn’t insured.
This may or may not have anything to do with TPAs. A TPA could negotiate a 30-day credit arrangement with a hospital to sweeten the deal for the insurance company. On its part, the hospital may escalate the charges for procedures on insured patients. Says Raja, “I was shocked to learn that the hospital charged different rates from patients with and without insurance cover.”
Added to all this is the typical intermediary problem: earning bad name for the insurers TPA represent. Some insurance companies are now rethinking about outsourcing claim settlements. Says Dr Shreeraj Deshpande, head (health and travel insurance), Bajaj Allianz General Insurance: “We used the services of TPAs based on their strengths.
But when customer feedback about their services did not match our expectations, we dropped the idea to protect our brand name.” Bajaj is now managing the TPA services itself through its own health administration team. “Since our motor and building insurance claims settlement was so smooth and customer-friendly, we decided to take on health claims too,” adds Deshpande.
Apart from reputation, many companies fear that with TPAs as intermediaries, clients are distanced from the company. V. Jagannathan, chairman and MD of Star Health and Allied Insurance, says, “Outsourcing critical functions, especially claims, can de-link the insurer from the insured and hurt the business.” All this doesn’t mean the end of TPAs. If carried out and understood well, they are useful to both insurance companies and the insured. Cashless options wouldn’t have been possible without them. “Before TPAs came into being, health insurance was a reimbursement policy.
Individuals incurred costs and then claimed reimbursement, resulting in a significant impact on their cash flows,” says Nimish R. Parekh, chairman (non-executive), United Healthcare, a Mumbai-based TPA. Besides TPAs also help the insured find hospitals that fit their treatment needs and rid insurance companies of the hassle of dealing with thousands of hospitals in nooks and corners of the country. Many insurers too swear by the convenience that TPAs offer. “We select TPAs with care and caution. Ever since we first introduced this model in the country, customer feedback has been very good,” says Antony Jacob, MD, Royal Sundaram.
Insurance companies which do not employ full-time TPAs utilise their services for medical checks or in places out of their network coverage. If you are still not convinced of their merit, don’t fret. Insurers are beginning to offer non-TPA insurance that will be cheaper. Beginning with the trend are public-sector companies. Says Jagannathan: “One can assume 5-6% of premium going towards TPAs.” So sans TPA, your premium bill can be lighter.
Some companies promise prompt reimbursements as the option to cashless claims. Sujata Dutta, vice-president, accident and health, Tata AIG says, “We do not offer cashless settlement but are prompt in handling claims with our own management network.” So cashless or less cash (non-TPA) or simple reimbursement, you do have a choice.
