Insurance
Deadlock over cashless healthcare continues

Despite news every now and then that the cashless facility will be started by PSU insurers at corporate hospitals in the four metros, there is hardly any progress in the matter

The three-month-old imbroglio between public sector insurers and hospitals over the cashless facility remains unresolved. Corporate hospitals are still unable to come to an agreement with public insurers over the standardised rate for different procedures.

Segar Sampathkumar, deputy general manager, New India Assurance, says, "We want to negotiate with corporate hospitals on a one-on-one basis because each hospital is different and hence will have different standardised rates. However, the committee of hospitals is keen to negotiate with the insurers, rather than have individual hospitals talk separately."

Sampathkumar said that the company had a meeting with the committee on 8th September and conveyed its position. "They have not got back to us, but we hope to meet again early October and make progress. The cashless imbroglio does not affect our business. We are a 90-year-old company with good credibility. We are trying to correct the system in the interest of policyholder. If there is high charge from hospitals, it will reduce the sum assured for policyholder and may not cover another illness in the same year," he said.

A recent survey found that despite the removal of the cashless feature, corporate hospitals in Mumbai were overcrowded and that there were no beds available for a new patient. The country is suffering from a lack of quality hospitals.

For now, both sides appear to be dillydallying since there has been no major business impact. The Insurance Regulatory Development Authority (IRDA), the regulator also does not seem to be eager to get involved in the issue.

According to industry sources, private insurance companies may join public insurance companies to negotiate rates with corporate hospitals. Private insurance companies have barely been able to keep their neck out of the water till now. They will be watching with interest the outcome of this conflict, to see how it might benefit them. Most private insurers are far from breakeven themselves. Addressing an event in Mumbai recently, Bajaj Allianz's chief executive Hemant Kaul said that the industry is not making money on mediclaim.

According to M Ramadoss, chairman and managing director, New India Assurance Co Ltd, "Insurance companies have been witnessing inflated, fraudulent, and unwarranted claims by some hospitals, when the patient had declared that he/she had insurance cover and chosed to go for cashless treatment. This is why insurer-funded healthcare cost turns out to be more than the individual-funded cost. We are trying to get as many hospitals on the Preferred Provider Network (PPN). The rates could vary from hospital to hospital, based on the location, facilities, equipment, etc. It is not as if one-size-fits-all. If there is an industry standard for standard rates, we will welcome it. Due to the absence of it, I have to step in, but not to rob hospitals of their profits. We are trying to benchmark average costs of the previous two-three years and using recommendations of doctors on panels to come up with frozen standard rates for procedures and treatments."

In August, the Delhi High Court had asked insurance regulator IRDA to make some arrangement to provide cashless facilities to policyholders in the wake of the dispute between insurance companies and city hospitals, because of which medical policyholders were inconvenienced. "The Insurance Regulatory and Development Authority (IRDA) should, as a regulator of the insurance industry, intervene and ensure that such changes do not affect existing policyholders...," Justice S Muralidhar said.

"You (IRDA) cannot leave patients suffering, saying that a meeting will be convened. Patients are not getting treatment because of the dispute between insurance companies and hospitals. It is your duty to act timely." The court also took strong exception to the remark by the IRDA chairperson, published in a newspaper, that it was a matter between insurance companies and hospitals and that there was no regulatory issue involved. IRDA has till date managed to evade its responsibility in the matter.

User

COMMENTS

samar mahapatra

6 years ago

The issue involves two sets of players in two domains, one in Insurance, fully regulated, and the Hospitals who are least regulated.It is a turf war, IRDA may not have jurisdiction for intervention.But Cashless remain the cutting edge of the health care delivery.Corporate groups are the favoured lot, almost 50% of cases, without any ban on cashless.Individual policy holders are the poor victims of denial by the Insurers.This is highly discriminatory , the IRDA must investigate.

samar mahapatra

6 years ago

Basically, the negotiating committees for hospitals have not satisfied the insurers/ policy holders, as to why should Insured patient pay more than an un insured person?What is happening is the IRDA/INSURERS can not force the hospitals to accept, the data backed, suggested schedule.IRDA is not the regulator for hospitals legally.It has to be enlightened self regulation in the domain, for good reasons.

v subramanian

6 years ago

To avoid the inflated bills and unnecessary charges of the hospital, I paid the hospital bills upfront and lodged claim under mediclaim. It took not less than 6 months for the insurer to settle the claim. It appears that someone in the insurance co gets a cut from the hospitals and do not like the policy holders to pay first and claim later.

REPLY

samar

In Reply to v subramanian 6 years ago

If cashless payment to hospitals are expected to be settled within 30days, so also reimbursement cases,unless there are shortfalls.

samar mahapatra

6 years ago

This is what happens when you have an overlapping issue like ULIP or a regulatory void as in health insurance administration.Perhaps it calls for a PI L to be addressed by HC/SC, or an ordinance by Govt of India deciding the jurisdiction in this dispute between hospitals and Insurers, in public interest.

REPLY

Ashoka

In Reply to samar mahapatra 6 years ago

Dear Samar ji,
I am completely agree with you. I guess I have met you before. Are you IAS officer? Can I have your mobile number please?

Regards,
Ashoka

arun adalja

6 years ago

really very sad affair and insurance companies pay inflated bills to hospitals very surprising as they have very tight norms for claims and i do not agree on this issue.if somebody comes out with real facts and figures i will be happy and irda cannot wash their hands for this issue.new india asked me for extension of overseas medical insurance to pay 50% more premium then earlier one in the same year.how can they make loss?

M R Borkar

6 years ago

I have personally experienced this n other unethical praqctices/systems/procedures employed by hospitals vis-a-vis petents from corporates.-

SANJAY M PRABHU

6 years ago

Its alarming wake up bell for our Regulatory Authority – IRDA. They cannot wash their hands by saying it’s a matter between insurance companies and hospitals. Its time to do homework and classify the Hospitals according to their rates for eg. 1 star, 2 star, 3 star, 4 star & 5 star hospitals, and fix the insurance premium according to the star category. If the policy holder wants to take a treatment at 5 star hospital let him pay that much higher premium. Insurance is a business of sharing the cost / losses of one person against the unclaimed premium of others, and hence insurance companies cannot afford to give a 5 star treatment to few at the cost of 1 star premium and hence IRDA should come up with the new premium structure according to the star category of treatment. Health Ministry too should intervene and regulate the private hospitals by standardizing the rates of private hospitals according to their star category.

We don’t know how the Private Players manages the show? but yes PSU Insurers are absolutely right, but at the same time they should adhere to the insurance contract of the existing policy holders, so that patients and their family members are not forced to inconvenience.


Sanjay M Prabhu
Vice President – Chartered Consulting
Mobile : 95940 88588

Nothing ‘unique’ about Aadhaar any more

A proposal approved by the cabinet will constitute a statutory authority to be called the National Identification Authority of India. It’s the new name for UIDAI.

The Union Cabinet on Friday approved a proposal to introduce the National Identification Authority of India (NIAI) Bill 2010 in Parliament.

The bill proposes to constitute a statutory authority to be called the National Identification Authority of India and lay down the powers and functions of the Authority, the framework for issuing unique identification (UID) numbers (Aadhaar numbers), major penalties and other related matters through an Act of Parliament. The proposal by the government is not new, apart from a new name for the controversial Unique Identification Authority of India (UIDAI).

"After the bill is passed in Parliament, the name UIDAI would be changed to NIAI. The rest of the functioning and job of the authority would remain the same," said Awadhesh Kumar Pandey, assistant director general for media, UIDAI.

According to a statement released by the government, the setting up will involve an expenditure of Rs3023.01 crore, which includes project components for issue of UID numbers (called Aadhaar numbers) by March 2011, and recurring establishment costs for the entire project phase, over five years ending March 2014.

The statement tries to provide more information about Aadhaar, but creates more confusion. It says, "The UID project is primarily aimed at ensuing inclusive growth, by providing a form of identity to those who do not have any identity." Does this mean that those who have an identity will not get the Aadhaar numbers? In addition, what about the inclusive growth of other people who already have some kind of identification? There are hardly any answers to these questions.

The statement also talks about strengthening of equity among marginalised sections of society. It is not clear how the Aadhaar numbers would be able to do this. The government claims that apart from providing an identity, the Aadhaar numbers would enable better delivery of services and effective governance. Would this imply that someone from Tembhali village in north Maharashtra's Nandurbar district will automatically receive food under the public distribution system (PDS), when the middlemen have looted the food before it can even reach the shop?

What's more serious is that the government does not say anywhere that the Aadhaar numbers will be issued to the citizens of India. Instead, it mentions that the Aadhaar numbers will be issued to "individuals residing in India and to certain other classes of individuals". This means that immigrants from neighbouring countries, residing illegally in India, would be able to procure such numbers too, akin to the ration card (PDS Card), and become citizens of the country.

Prime Minister Manmohan Singh will inaugurate the ambitious UID project at Tembhali village in north Maharashtra's Nandurbar district this month-end. According to a report from the Press Trust of India, the 12-digit Aadhaar number will be mandatory for all government schemes and will serve as a unique identification number for citizens.

To get the number, citizens are required to produce any of 29 listed documents as proof of domicile. If no document is produced, the district collector in rural areas and municipal commissioners in the urban areas will be authorised to issue an identity certificate to the individual.

User

COMMENTS

Keshav B Bhat

6 years ago

It looks like we indians have aGOVERNMENT, of the fools by the fools and for the fools. What we are we deserve to have it nothing else. all of us donot realise if everybody prospers country will prosper. we want to gain ourselves but dont want to see any one else is gaining or prospering.

All new Ideas come to all our leaders to make themseves populer and make themseves rich by the tax payers money.
Regards,
Keshav B Bhat

mary

6 years ago

sir,

the UIDAI will go down the way other govt. deptt are going.
some JS or so, will take over breeding the redtapism & inefficiency.

Bajaj Allianz Jiyo Fit – a naïve approach to reduce claims ratio

The scheme involves cross selling health, wellness, beauty and financial products under the garb of preventive healthcare

Jiyo Fit is a new product launched by Bajaj Allianz General Insurance, Yes Bank and Visa. Under this, the policyholder can spend on partner gyms like VLCC, Talwalkars and Gold Gym to earn points; reward points on purchase of healthy foods, including fruits, vegetables at high-street retailers; more points on regular medical check-ups and discounts on diagnostic tests at partner clinics; as well as discounts at partner chemists. There is also an option to purchase Visa debit card from Yes Bank at Rs150 per annum and open a zero balance savings account with Yes Bank.

Bajaj Allianz, which has made its name for quality service, will start the Jiyo Fit wellness initiative in 15 towns in India in the first phase.

The big idea is preventive healthcare, says Hemant Kaul, CEO, Bajaj Allianz. The plan is to help reduce the claims ratio through helping policyholders adopt a healthy lifestyle and incentivise them to maintain healthy practices and stay fit. A high claims ratio is killing the health insurance business. Almost all insurers are losing in trying to provide health cover. But the reasons for the high claims ratio lie elsewhere-fraudulent claims, exorbitant hospital costs, medicine costs, lack of proper loading of group insurance. This is bleeding insurers and in turn affecting individual policyholder benefits and premiums.

But what if a policyholder visits a local gym and buys fresh fruits and vegetables from the local subzi mandi with cash, or uses a regular debit card for purchases of health products at high-street retailers? That may keep you healthy and may do as much for preventive healthcare, but it will not earn you points under the Jiyo Fit plan. One will have to go to the marquee gyms and health food retailers under the plan. In that case isn't this a cross-marketing of health, wellness and financial products? A Bajaj Allianz source told Moneylife that the company would not earn commissions from any of the partners. The sole benefit for Bajaj Allianz is a reduction of the claims ratio that would improve profitability.

The sources said that a company survey indicated that women were keen on redeeming points/discounts at beauty clinics and spas. Bajaj Allianz has extended the 'innovative' initiative to accede to the wishes of women policyholder. But the link between beauty clinics and spas and preventive healthcare looks rather stretched.

Indeed, a key component of the 'innovative' preventive healthcare initiative could be the zero-balance savings account from Yes Bank and debit card from Visa. As Uttam Nayak, country manager-South Asia, Visa, puts it, "We have been after Yes Bank for a tie-up for long time and now we are working with them, thanks to the innovative approach from Bajaj Allianz." What has Visa and Yes Bank got to do with Jiyo Fit? Well, some 97% of the personal consumption expense (PCE) is in cash. "The target is to have PCE with 16% electronic usage…soiled cash notes can be unhealthy for individuals," said Nayak.

Do others have similar offerings? New India Assurance gives a discount on the premium if a policyholder shows he has a gym membership. It's a more direct approach, but it does not crosscheck if a policyholder visits the gym regularly. Apollo Munich has a wellness approach with Healthline. Just ring them and quote a customer ID to reach experts and avail their help in primary consultation, health-related counselling, individual referrals, health information, nutrition and diet. The services on the Healthline are available at no extra cost to customers.
 
Under the Bajaj Allianz initiative, policyholders will earn points for every visit to the gym. It is an optional offer and is not bundled. We are sure more insurance companies will join the bandwagon in the days ahead to propagate the wellness initiative. Of course, its success will depend on simplicity, the quality of health education and the relevance of the services offered.

User

COMMENTS

SAMAR

6 years ago

Improving health risk by preventive module is a welcome step.But profilgacy in underwriting of group health schemes has been the undoing of the insurers in the post detariffied regime. Hopefully, the market is changing, as seen by the irda data on 09-10 results.

SAMIR

6 years ago

INDIAN R NOT FOOL Mr. Bajaj!

samar mahapatra

6 years ago

Preventive care is ok, but would be more relevant for Corporate Groups.As per CAG report , hundreds of Companies are undercharged by PSU insurers for group schemes as they cross sell property insurance with Mediclaim as low cost bonus offer.Eventually they lost out money.

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)