Bombay HC notice to health insurers on pre-packaged rates

Bombay HC had asked IRDA to come up with package rates for 42 ailments based on policyholder’s sum insured and type of hospital. GIC has intervened to be part of the PIL. They have expressed difficulty in implementation of pre-packaged rates due to the lack of hospital regulator

The Bombay High Court (HC) has issued notices to 25 non-life insurance companies offering health insurance seeking pre-packaged rates for 42 ailments on the basis of sum insured and on the type of the hospital. HC had earlier directed Insurance Regulatory and Development Authority (IRDA) to come up with package rates for 42 standard ailments in the policy document. IRDA put the ball in health insurance companies court and hence General Insurance Council (GIC), a statutory body representing all non-life insurers intervened to made party to the public interest litigation (PIL) filed by  activist Gaurang Damani on issues facing mediclaim policyholders.

According to Mr Damani, “If mediclaim policies indicated the amount an insured was eligible for specific ailments, it will ensure that they have clarity on which hospitals to go; the hospitals too would know how much they would get.” Packaged rate for standard procedures specified in the policy will force the insurance companies and third party administrators (TPAs) to become more transparent about what they are willing to pay, avoiding nasty surprises for the policyholder later. Today, going to preferred-provider-network (PPN) does not ensure complete coverage for hospital bill, even if there is no sub-limit for the said procedure and even when the policyholder has availed room facility within its room-rent limit.

GIC agreed that there should be uniformity in packages offered in insurance policies. They emphasised the need to have hospital regulator as there is no standardisation in the hospital charges. Mr Damani argued that there was a provision in the Clinical Establishments (Registration and Regulation) Act to appoint a regulator to regulate the hospitals. Unfortunately, IRDA has not appointed such an authority.

According to Mr Damani, “The good old cashless mediclaim days are no longer available with government insurers, who realised it was more expensive than reimbursement claims. There is no financial incentive to restart cashless facility. Information on package rates for 42 standard procedures will help policyholders know what they are entitled to. Today, there is lack of transparency and third party administrators (TPAs) have huge discretionary powers. Bills for same procedure undergone in the same hospital are settled with different amounts.”


The next hearing is scheduled for 28th November.

Read – Mediclaim packaged rates for 42 ailments will marginalise TPAs' powers





3 years ago


nagesh kini

3 years ago

So Gaurag Damani's efforts are at long last being rewarded. Good luck to him!
What made GIC, the holding co. of all the PS insurance companies, intervene?
IRDA has been wrongly claiming that anything that had to do with medical service providers is outside 'their purview' - this is indded an absurd and untenable stand. They have everything to do as it concerns millions in health-related claims.
The IRDA needs to get the MOF to instruct the MOH to activise the Health Regulator and this is no big deal!

m e yeolekar

3 years ago

It shall be too much too expect that Hospital Regulator shall be an all season panacea or a final one time decisive solution to the issue. One needs to remember that there are bound to be variations in 42 or more standard ailments under consideration, on account of inherent heterogeneities of the respective ailments arising out of stage,severity and complications.Beyond a certain level of details , "package"approach would become necessary. Prof M E Yeolekar,Mumbai.


nagesh kini

In Reply to m e yeolekar 3 years ago

Prof. Yeolekar - When properly implemented nothing is impossible. The powerful TPA lobby has been cheating the insured public who have had to pay up rising premia and dwindling claim settlements.
The PSU in-house TPA will soon appear and we no longer need the TPAs.

Hero MotoCorp posts modest 9% increase in net profits

The company is undertaking a major cost rationalisation exercise which is expected to see cost benefits. However, presently, the company’s net profit and net sales grew 9% and 10% respectively. It has sold fewer vehicles than the June quarter

For the quarter to end-September 2013, Hero MotoCorp reports a net profit of Rs481 crore, up 9% when compared to Rs441 crore it recorded in the year ago period. Meanwhile, its net sales stood at Rs5,726 crore, up 10%, for the three months ending September 2013 when compared to Rs5,187 crore in the same period last year.

The company sold 14,16,276 two-wheelers during the second quarter of the FY14 fiscal when compared to 13,32,805 vehicles sold in the same quarter last year. However, the number of vehicles sold is 9% lesser than the number it sold in the preceding quarter, in June.

The company’s EBITDTA margins stood at 14.5%.

Pawan Kant Munjal, managing director and CEO of Hero MotoCorp, said, “With our performance in the second quarter (July-September) of FY14, we have clearly demonstrated that we can have good margins even as we strengthen our market leadership. When we commenced our solo journey a little over two years ago, protecting our market share was the top-most priority. Having achieved that, our strategy now clearly is to build on that leadership and make our business more profitable through several innovations, including a cost-rationalisation initiative. The results are already showing. Going forward, as well move to consolidate our leadership through technology, innovation and youth-focused products, we will certainly strive to keep improving our profitability as well. These numbers bode well for the festive season. The sentiments are positive and there is a momentum for us in the market, and we are definitely looking at demonstrating our leadership by record dispatch and retail sales during the festive period.”

However, the company expects some difficulties ahead, in terms of costs, especially input prices. Mr Munjal said, “The rupee depreciation, which has adversely impacted several sectors, has also pulled up the costs of essential commodities such as steel, nickel, copper and rubber. Going forward, these higher input prices, combined with increasing labour costs, are likely to put a lot of pressure on margins in the industry.”

During the quarter, the company commenced construction of its Rs450 crore “Hero Centre of Global Innovation and Research & Design” at Kukas, on the outskirts of Jaipur in Rajasthan.

The company’s share price went up 17 points, or 0.86%, to Rs2087 on BSE wile the benchmark S&P BSE Sensex stood at 20767, down 0.47%.


Is it a ‘Modi’ Rally going on in the market?

Credit Suisse says that the “hopes” pinning on a victory for BJP led by Narendra Modi during 2014 general election plus attractive valuations of beaten down sector and ample global liquidity are fuelling massive speculation

Credit Suisse has said that the chances of a Narendra Modi-led NDA win is already fuelling hopes and the market speculation is reflecting that. It is one of the three factors pushing stocks up. One is the aftermath of sharp divergence in stock performance (discomfort holding winners when losers are so cheap). The second is easy global liquidity (taper pushed by a few months); and the third is the "hope" of a Narendra Modi-led NDA winning in 2014. According to be brokerage house, telecom, pharma and staples are up for the year-to-date while every other sector has been down. Despite the recent rally, Credit Suisse notes that PSU banks, metals, utilities and industrials are down as well inducing the temptation to bottom-fish.

The note said, "the 'hope' (wishes translating to forecasts, in our view) of a strong 2014 verdict can make September/December quarter results meaningless. Not surprisingly, the past two weeks' performance suggests this rally may already have started."

However, the note said, "Falling earnings estimates are likely to start to dominate price action in a few weeks/months." The brokerage believes that the rally could end badly due to falling earnings estimates.


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