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Mediclaim: Should a hospital bill be prorated based on your room rent limit?

New India Assurance has paid Rs34,313 towards a mediclaim that was earlier rejected by the TPA on flimsy grounds. But, payment towards visiting charges and investigation were prorated based on room rent limit. Is it justified or is the TPA being unscrupulous?

Sujit Banerjee (name changed), a retired senior citizen of 73 years of age, had approached the Moneylife Insurance Helpline seeking help with his rejected mediclaim on flimsy grounds by TPA (third party administrator). Due to Moneylife’s intervention, Mr Banerjee got a payment of Rs34,313 from New India Assurance, but the payment towards visiting and investigation charges were prorated based on room rent limit. Is it justified?

 

There will be reduction in payment for visiting charges and investigation depending on what was allowed for the room for which you were eligible, but should the payment be prorated? Policyholders need to check what the insurance policy wordings specify about room rent limit and its impact on other charges. If the mediclaim policy clearly states that the charges will be prorated if you avail a room with higher rent than your limit, then it is acceptable.

 

Read - New India Assurance pays Rs34,313 for mediclaim initially rejected: Another Moneylife success

 

How does room rent limit affect mediclaim payment? Unfortunately in India, many hospitals charge differential amounts for doctor’s visit, investigation and other charges based on the room you avail. For example, if you go for a private room, the doctor’s visit charges will be higher than what you would have paid if you were in shared room. If you avail of room higher than what your cover allows, the insurance company is right in not just disallowing the difference in the room rent, but also for the other charges.

 

Some policies go a step further and specify that they will pro-rate the claim based on your room rent and actual room you availed. For example, if the room rent limit is 1% of the sum insured (SI) and assuming SI of Rs1 lakh, your room rent limit is Rs1,000 per day, in case you avail a room of Rs2,000 rent, your full claim amount is pro-rated to pay only half of the claim. The remaining half will have to be borne by the policyholder.

 

What the New India Assurance Mediclaim 2007 policy states - “In case the insured opts for a room with rent higher than the entitled category (1% of SI), the charges payable under clauses 2.3 and 2.4 shall be limited to the charges applicable to the entitled category.” If the TPA is paying on a prorated basis for all the claims, then it is either wrong interpretation or wilful approach to short-change the insured.

 

For example, in the case of Mr Banerjee, he had availed a room of rent Rs4,500 when he was eligible for only Rs1,000. The deduction of visiting charges of Rs4,200 was Rs3,267 while the deduction of investigation charges of Rs6,200 were Rs4,823. What it means is that the TPA has prorated the payment by a factor of 4.5. The paid amount for visiting charge is Rs4,200/4.5 = Rs933, while the paid amount for investigation charge is Rs6,200/4.5 = Rs1,377.  

 

Correct approach – “If other charges vary, but not in proportion to room rent, then only deduct such proportion of variation.” It means that if in this example, the visiting charges for the room of rent Rs4,500 is only double of the charges for room rent of Rs1,000 then the deduction should have been Rs2,100 instead of Rs3,267. The TPA is doing the easy calculation of prorating instead of really finding what is the difference in the visiting and investigation charges for the room with rent Rs1,000 versus that of Rs4,500. New India Assurance is reconsidering the Mr Banerjee’s claim after Moneylife’s intervention on proration of doctor’s visit and investigation charges.

 

If your charges for a doctor’s visit, investigation and others mentioned in clauses 2.3 and 2.4 of New India Assurance Mediclaim 2007 are prorated based on room rent limit, here is what you can do. Find out from the hospital the charges for doctor’s visit, investigation and others for the room to which you are entitled based on your insurance cover. If the deductions based on TPA doing the prorating is higher than what it should be based on what you find from the hospital, you can fight to get higher payment from the insurance company. If it does not give justice, go to the Insurance Ombudsman.

 

But, there are specific conditions under which the New India Assurance TPA has valid reasons to do the prorating of claim. Where  it  is  not  possible  to  ascertain  what  the  degree  of variation  is,  either  by  reference  to  previous  bills  or  authentic tariff,  New India Assurance TPA may  deduct  all  charges  except  medicines  and consumables proportionately. Also, where  the  hospital  does  not  have  rooms  in  the  entitled category at all, or where the minimum room tariff is higher than the entitled category proportionate deductions will have to be made by the TPA. It means prorating of doctor’s visits, investigation and other charges are valid in the above two scenarios.

 In case you have an insurance issue, please write to Moneylife Foundation. Click here

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COMMENTS

Rajiv

3 years ago

Heritage rejected my Doctor Bill as it was Outsider. Is there any rules that the treatment should be done by the doctor of the same hospital ???????

Subhas Mallik

4 years ago

Very useful article.Kudos to Moneylife for doing excellent job in exposing the high handedness of TPAs in denying the insurance claims of hapless victims.

HG Sharma

4 years ago

It is almost certain that no Hospital will have room rent matching the entitlement of Insured .
It is advisable that Insurer makes it mandatory for the Hospital to define the extra amount they charge ( Compared to lower/lowest or general ward of the Hospital).
This can form a better basis for deductions.
You cant expect a patient to avail consultation and receive medicines as an Out patient if the lowest of the accommodation is higher than his entitlement.

Sanjay M Shah

4 years ago

ONE THING I FAIL TO UNDERSTAND IS THAT, WHEN HOSPITAL IS CHARGING MORE FOR ROOM RENT ACCORDING TO THE ROOM SELECTED THE TREATMENT GIVEN BY DOCTOR IS GOING TO BE THE SAME FOR ANY ROOM CATEGORY.THEN WHY DOCTORS & HOSPITAL ARE CHARGING ACCORDING TO ROOM CATEGORY? SAME WAY FOR PATHOLOGY & OTHER TEST HOSPITAL IS CHARGING AS PER ROOM CATEGORY. NO ONE IS RAISING VOICE FOR THIS. EVEN HOSPITALS & N.HOMES SUPPLY MEDICINES FROM THEIR INTERNAL STORE & WE HAVE TO SERVICE TAX ON THAT, IF BUY FROM OUT SIDE WE COULD HAVE GOT DISCOUNT ON IT & SERVICE TAX IS SAVED. ACTUALLY THERE SHOULD BE ONLY ONE TYPE OF MEDI CLAIM POLICY & LET ALL COMPANIES CHARGE PREMIUM WHATEVER THEY WANT.

deepaksb

4 years ago

In Dec 2011- a surgery ( removal of Dermoid cyst ) under DAY CARE.( New India assurance Mediclaim policy-Sr.Citizen.ULIP holders)



Surgery was done after informing TPA-MD India in writing and obtaining confirmation of claim intimation under day care.Treating surgeon had given diagnosis and treatment in writing in advance.



My claim was rejected by TPA with an excuse that NO HOSPITALISATION exceeding 24 hours -was done hence claim is rejected FULLY.



TPA has gone one step further and has informed me that an ordinary MBBS doctor ( GP) can perform this surgery of removal of cyst in a GP’s clinic !!!!!!!!!!



Actual surgery lasted for over 45 minutes in an operation theater and 10 to 12 stitches.Cyst removed is of the size of a table tennis ball !!!!!!!!!!!!!!!!!! ( pathology /biopsy reports submitted to TPA post surgery)



I am sure an audit of authenticity of medical degrees of officials of TPA -MD India should be done by a competent authority to confirm if these medical professionals - employed by TPA holds a valid degree from an approved university/institute OR they are FAKE professionals.



Endless communication with MD India,New India and even IRDA has not given any result.



IRDA is also taking sides of TPA and NEW India.( Most of officials of ombudsman are from PSU insurance companies.)



Insurance Ombudsman's post at Mumbai-Santacruz office ( Maharashtra & Goa) - was not filled up for OVER SIX months.There is BACKLOG of cases with ombudsman for over ONE AND HALF years.



Policy holders’ complains received by this Mumbai based ombudsman in Oct 2011 are being looked into till date (25th June 2013-delay of over ONE AND HALF YEAR)



Leading consumer activists/organisations can do NOTHING to expedite at least appointment of ombudsman for a small/individual policy holder to get justice.





We are living in a true Democracy run by Dictatorial Insurance cos. And TPA s !!!!!!!



REPLY

Suresh

In Reply to deepaksb 4 years ago

Readers may be surprised to know that some of the doctors hired by MD India to vet claims are Homeopathic Doctors! MD India claims that these Homepathic Doctors are competent enough to verify allopathic medical claims!

-Suresh

nagesh kini

In Reply to Suresh 4 years ago

The IRDA will say that homoepaths ayurvedics and unani deal with humans!
IRDA representative is on record at the Bombay High Court that they are aware that the TPAs appoint veterinarians too! They also deal with animal ailments - do the animals not have almost similar anatomy and physiology?

nagesh kini

In Reply to Suresh 4 years ago

The IRDA will say that homoepaths ayurvedics and unani deal with humans!
IRDA representative is on record at the Bombay High Court that they are aware that the TPAs appoint veterinarians too! They also deal with animal ailments - do the animals not have almost similar anatomy and physiology?

deepaksb

In Reply to Suresh 4 years ago

I will not be surprised if these doctors appointed by TPAs are having fake degrees from fake institutes.

TPA doctors may be having a poor academic record - hence they can not work else where either in a job or private practice-are employed by TPAs.

Theese doctors employed by TPAs may be even Veterinary Doctors fit for treating only animals.

Christopher

4 years ago

I too have a "New India Assurance" Mediclaim policy and got a similar deal from the TPA. Out of the 20k bill, I guess the TPA passed approx 7-8K and my first thought was to move to another service provider. Can anybody share some good Insurance Companies worth to be with for years to come.

PS: I am with New India Assurance since 2001- paid all the premiums but feel cheated when I needed insurance

REPLY

Mukul H Agarwal

In Reply to Christopher 4 years ago

Hi Christopher, you can now port your policy at the time of renewal. You should start the process 45 days before the renewal date. Apollo Munich and Max Bupa can be considered as they do not have any caps or sub limits on treatments and you can be assured that in most of the cases, your claims will be paid in full.

Christopher

In Reply to Mukul H Agarwal 4 years ago

Thanks

Vaidya Dattatraya Vasudeo

In Reply to Christopher 4 years ago

Going to another service provide does not resolve present injustice. Why not file a case in Consumer Courts. Where are you based.

Christopher

In Reply to Vaidya Dattatraya Vasudeo 4 years ago

I am located in Mumbai. Since I am not aware of a case can be built, what is the duration after which one can take the case up? I assume one can refer to the judgement being passed that the article refers to.

Gopalakrishnan T V

4 years ago

Why these TPAs and Insurance companies have some business ethics and be fair to the customers.They should not compromise on their profit margin but at the same time they cannot ignore Customers rights and entitlements and the claims should be settled without the intervention of an outsider.Even if the claim is wrong by some mistakes, the insurance Company should be fair enough to rectify the mistake and settle the entitled dues. That is business ethics and only those who adhere to such values and ethics can remain in business for long.This is the reality of life situations.This is applicable to Insurance Companies owned by the Government also. Just because they can survive in business because of the backing of the Government, there is something called market reputation and good will which can be earned only if their dealings are just, fair and prudent. Money Life is doing a great job and these matters should form part of the assessment of the TPAs and Insurance Companies' as and when they are rated by their regulators.

JP Power Ventures shuts down Vishnuprayag Hydro Power plant due to floods in Uttarakhand

While there is no damage to the power house, the barrage has been suspended and would take around 3-4 months to resume full operations, JP Ventures said

Jaiprakash Power Ventures, a subsidiary of Jaiprakash Associates, has informed the exchanges that its 400 MW Vishnuprayag Hydro Power plant has been shut due to the unprecedented floods in Uttarakhand.

 

While there is no damage to the power house, the barrage has been suspended and would take around 3-4 months to resume full operations, JP Ventures said. While the management has not been able to assess the internal status of the barrage, the structure is intact.

 

However, the loss (including the loss of profit) would be minimal due to enforcement of force majeure in the PPA agreement and the cover of an Industrial All Risk Insurance policy.

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