Insurance
Personal Finance Exclusive
IRDA comes up with landmark draft health insurance regulations

IRDA has come up with momentous regulations which will change the health insurance industry workings if the draft is implemented without watering it down. TPAs' role will get marginalized and hence they may try to scuttle the implementation in its current form

Insurance Regulatory and Development Authority (IRDA) has finally issued draft health insurance regulations addressing several areas of concern which were raised in a public interest litigation (PIL) by social activist Gaurang Damani. The draft covers product design, renewability, portability, file and use procedures, protection of policyholders' interest, servicing of health insurance policy, third party administrators (TPA), contract between insurer and hospitals and so on.

According to Mr Damani, "They have accepted 80%-90% of what I had demanded in the court. A few minor things remain, some of which are already there in their other circulars, but just need to be added to the policy document. I would mention the same in the next court hearing. One point that is missing in the draft guidelines is need for a doctor's signature in case of claims denial."

The important points in IRDA guidelines are related to following:

  • Entry and exit age - All health insurance policies shall provide for entry age at least up to 65 years. All health insurance policies shall not have an exit age for renewal of the policies, once the proposal is accepted, provided the policy is continuously renewed without a break.
  • Cumulative bonus to be mentioned in the policy document
  • Mediclaim denial grounds to be given in writing
  • Reward a favourable claim ratio
  • Refund on pre-insurance med check-ups - A proposal resulting into a policy shall reimburse at least 50% of the medical exam cost.
  • Separate grievance cell for senior citizens
  • Increase in premium must be in writing and must be justified
  • Claims independent of multiple fixed benefit policies - The insurer shall make the claim payments independent of payments received under other similar polices.
  • If two or more policies are taken by  an insured during a period from one or  more  insurers,  where the  purpose  of  such  policies  is  to  indemnify  the  treatment costs, the insurer shall not apply the contribution clause but the  policyholder shall have an option to chose insurer with whom the claim is to  be settled. In all such cases, the insurer shall be obliged to settle the claim without insisting for contribution clause.
  • Insurers  may  provide  coverage  to  non-allopathic  treatments  provided  the treatment has been undergone in a government hospital or in any institute recognized  by  the government.
  • Any  product  that  is  being  offered  in  the  market  by  insurance  companies shall not be allowed to be withdrawn  in respect of the existing customers of  the  product,  unless,  the  existing  customers  are  given  an  option  to switch to a similar product under specific written consent.
  • Uncomplicated one page customer information sheet to cover key benefits, exclusions and grievance mechanisms.
  • Renewal cannot be denied randomly
  • Waiting period for pre-existing diseases (PED) be clearly specified
  • Claim settlement within 30 days
  • Insurer to make direct payment to the hospital and policyholder (not through TPA). Cheques will have to be written by the insurance company and send to hospital (for cashless) and policyholder (for reimbursement). It means that cheques cannot be held by TPAs as a float.
  • ID card to have logo of the insurance company. In  case  the  policy  is  renewed,  provisions  to  be  established  by the  insurer  to  ensure  there  shall  not  be  any  need  for  re-issue  of  fresh cards provided there is no change in the details of the policyholder. It means auto-renewal of same ID cards.
  • Agreement between the TPA and insurance company to be registered with IRDA
  • Seamless transfer of policies services by an existing TPA to the new TPA
  • Claim settlement - Specific ground of settlement and denial of claim must be mentioned
  • All insurers shall have an agreement directly with the hospitals to establish the list of network providers. The insurer  shall  be  responsible  for  carrying  out  an empanelment  process  of  hospitals  or  health  care  providers  to  provide  cashless facility to the policyholder. The TPA role is effectively marginalised.

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COMMENTS

Mathai

3 years ago

To Mr. Gaurang Damani:

An aspect to be taken up by Moneylife with IRDA, is to challenge the wide spread practice of hospitals to charge for surgery, doctors fee etc, basis the type of room one takes. If one takes a single room, the cost of surgery and cost of surgeon, anaesthesia etc, is charged much higher than if the patient takes a double room. The difference becomes even more, if one takes a ward, instead of a single room. This has no logic, as the same operation theatre, doctor and team is used and same pre operation preparation area and same post operation recovery area. For same service, the same charge should apply, irrespective of room type booked for use before and after an operation or for any treatment in the rooms. Only services that change due to room type e.g. nurse to patient ratio in shared rooms compared to single rooms, can have change in rates, basis the extra man hours allocated.

The current practice is just looting of people wanting some privacy in times of stress

Jitendra Gupta

4 years ago

Dept of legal affairs
Inquiry GIPSA and TPA role by Director of Vigilance declare it non constitutional, illegal against public interest. Transition and the way fraudulent business is being conducted by GIPSA and TPA in cashless medicalim service is questionable by Dept of Economic affairs.
1. General Insurance Public Sector Association (GIPSA), a group of 4 PSU decided to standardise rates for around 42 medical procedures across various categories of over 4000 hospitals for settling cashless claims, but is looting and cheating patient by GOOF-up with hospital and TPA. When 4 PSU come together to form GIPSA, they r creating monopoly in rates and r trying to exploiting the trapped patient who must have landed up in hospital for first time for surgery after paying hefty premium for years.. GIPSA common monopoly rates for 4 PSU is against the original policy because of which it was necessary to create 4 PSU for competition.
2. Rates as decided by GIPSA or TPA in package is almost 4 times the rate that any patient can do a procedure under cash payment in same hospital. This can be confirmed by calling the reception counter of any particular hospital. In open market hospital faces completion with other hospital so rates for cash payment r most competitive. Each hospital as of today has 3 rates, one for cash payment, 2nd for patients registered with private company insurers which is higher than cash payment most costly is GIPSA applicable to patients insured with 4 PSU. And all this is not make known to patient at the time of admission. There cannot be separate charges for insured and non insured patients again different rates for Pvt company insured patient GIPSA insured patient.
3. GIPSA or TPA different category packages has no transparency how a category is chosen rates fixed or negotiated for that category. The moment any authority is negotiating for fixing rates, in implies that there is every possibility of inviting bribe corruption. Patient does not know if he has been right placed in the right category for his surgery by hospital. Hospital arbitrarily decides this higher category to squeeze out maximum profit not only from patient by exhausting his mediclaim limits but also from PSU which is nothing but public money. Hospital refuses to explain his placement into any such category. Hospital has no display on wall or catalog or break up for such rates charged in any given category. Thus here also GIPSA or TPA offers corruption chance with conspiracy between Hospital, GIPSA, PSU and TPA.
4. Under what law / rule, 4 PSU have formed this association ? Like IRDA, should GIPSA or TPA also not get passed by both house of parliament before it start function arbitrarily.
5. What is Legal identity of GIPSA. Whether GIPSA is registered under any law of the land that is whether it is registered as a society or a trust or under Companies Act. ? In absence of any such legal identity it is a illegal association to expolit monopoly of common rates of 4 PSU to cheat and commit fraud on public for arbitrarily directing hospital to charge rates which are many times more than prevailing market rate charged by that particular hospital for cash services.
6. In absence of no governing body that keeps track on the working of GIPSA TPA, makes It venerable to corruption.
7. Is GIPSA role of TPA, formed under some conspiracy to promote business of private insurer who had negligible market share earlier but after coming of GIPSA this has reached to 50%.
8. Health service Regulator and Insurance act, no where mentions, that TPA as an intermediatory or otherwise can settle claims. Claim settlement can not be done outsourced to a TPA and must be done in-house by a qualified medical practitioner as per section 42D (5) (e) of the Insurance Act.
9. there is no mandate in the Insurance or IRDA Act which allows TPA's or GIPSA
to negotiate on behalf of insurer. This activity must be performed by
insurer only.
For ur reference below link of DNA newspaper
http://www.dnaindia.com/mumbai/report_th...
The big medical insurance loot - Mumbai - DNA

Amar Wadhwa

4 years ago

Not only period of PED to be specified, but PED itself requires to be defined in great details. If the insured is not aware of any PED although the same may be there in dormant condition, should a claim by the insured be denied?

Anand Kher

5 years ago

This is a laudable effort by Mr.Damani and will help to marginalise the highhandedness of the Insuring companies,especilly in case of Senior Citizens who are considered in very low esteem by these Insurerers.

Sailesh Mishra

5 years ago

Its positive step at least IRDA has prepared the Draft , now lets see the implementation. Thanks to effort of Money Life Foundation Team and People like Gaurang Damani tired-less Advocacy this was possible. IRDA should make the all Health and Life Insurance products Elder and Disable friendly.

Krishnaraj Rao

5 years ago

Great work by Gaurang Damani! Yeoman service to We the People.

Nagesh Kini FCA

5 years ago

It would be worth the while for every like minded advocacy groups join hands with the CMAC to stem the rot in Mediclaim across the board.
The four PSU insurers were pioneers in health coverage. Other collecting hefty premium they've done precious little by way of research, life style study, premium rate analysis.
In stead of seamless In House Claims Settlement Dept. they were forced by a lobby into going for outsourced TPA system which is made up of the worst of the goons - no proper infrastructure to respond, receive and record calls, staff exiting unable to bear the angry customers, un- and underqualified 'doctors' to evaluate and process the claims leading to rampant uncalled for deductions and rejections.
The unilateral, without notice withdrawal of cash less is the greteat blow to the hapless insureds.

Jitendra Gupta

5 years ago

Inquiry GIPSA and TPA role by Director of Vigilance declare it non constitutional, illegal against public interest. Transition and the way fraudulent business is being conducted by GIPSA and TPA in cashless medicalim service is questionable by Dept of Economic affairs.
1. General Insurance Public Sector Association (GIPSA), a group of 4 PSU decided to standardise rates for around 42 medical procedures across various categories of over 4000 hospitals for settling cashless claims, but is looting and cheating patient by GOOF-up with hospital and TPA. When 4 PSU come together to form GIPSA, they r creating monopoly in rates and r trying to exploiting the trapped patient who must have landed up in hospital for first time for surgery after paying hefty premium for years.. GIPSA common monopoly rates for 4 PSU is against the original policy because of which it was necessary to create 4 PSU for competition.
2. Rates as decided by GIPSA or TPA in package is almost 4 times the rate that any patient can do a procedure under cash payment in same hospital. This can be confirmed by calling the reception counter of any particular hospital. In open market hospital faces completion with other hospital so rates for cash payment r most competitive. Each hospital as of today has 3 rates, one for cash payment, 2nd for patients registered with private company insurers which is higher than cash payment most costly is GIPSA applicable to patients insured with 4 PSU. And all this is not make known to patient at the time of admission. There cannot be separate charges for insured and non insured patients again different rates for Pvt company insured patient GIPSA insured patient.
3. GIPSA or TPA different category packages has no transparency how a category is chosen rates fixed or negotiated for that category. The moment any authority is negotiating for fixing rates, in implies that there is every possibility of inviting bribe corruption. Patient does not know if he has been right placed in the right category for his surgery by hospital. Hospital arbitrarily decides this higher category to squeeze out maximum profit not only from patient by exhausting his mediclaim limits but also from PSU which is nothing but public money. Hospital refuses to explain his placement into any such category. Hospital has no display on wall or catalog or break up for such rates charged in any given category. Thus here also GIPSA or TPA offers corruption chance with conspiracy between Hospital, GIPSA, PSU and TPA.
4. Under what law / rule, 4 PSU have formed this association ? Like IRDA, should GIPSA or TPA also not get passed by both house of parliament before it start function arbitrarily.
5. What is Legal identity of GIPSA. Whether GIPSA is registered under any law of the land that is whether it is registered as a society or a trust or under Companies Act. ? In absence of any such legal identity it is a illegal association to expolit monopoly of common rates of 4 PSU to cheat and commit fraud on public for arbitrarily directing hospital to charge rates which are many times more than prevailing market rate charged by that particular hospital for cash services.
6. In absence of no governing body that keeps track on the working of GIPSA TPA, makes It venerable to corruption.
7. Is GIPSA role of TPA, formed under some conspiracy to promote business of private insurer who had negligible market share earlier but after coming of GIPSA this has reached to 50%.
8. Health service Regulator and Insurance act, no where mentions, that TPA as an intermediatory or otherwise can settle claims. Claim settlement can not be done outsourced to a TPA and must be done in-house by a qualified medical practitioner as per section 42D (5) (e) of the Insurance Act.
9. there is no mandate in the Insurance or IRDA Act which allows TPA's or GIPSA
to negotiate on behalf of insurer. This activity must be performed by
insurer only.
For ur reference below link of DNA newspaper
http://www.dnaindia.com/mumbai/report_th...
The big medical insurance loot - Mumbai - DNA

Sunil Takalkar

5 years ago

As regards claim settlement within 30 days, it will be a sigh of relief.for policyholders; but chances are rejection of claims without proper analysis of claims.
With this system, Deficiency Memo system will be outdated.
Hope it will be implemented before 30th June 2012.

KIREET DESAI

5 years ago

The draft if goes through as it is, it will ease many problems faced by insured.

The intimation of claim period should be same under all Health insurane policies.

In case, the claim is under dispute and insured approach insurer, the details of discussions need to be recorded and insured to sign it.

sajjan lalwani

5 years ago

most of tpa's faxes are not working or a readable copy is not printed and major time is waisted.to overcome this a email a/c is created for all tpa's and hospital should send scan copies to avoid unreadable copies.and tpa's email should acknoledge automatically that claim has been recd and if any problem is there as far as readability is concerned,then tpa will revert back to hospitals within next 10 minutes. a fine mechanism has to be created to avoid delays-sajjan lalwani 9352956133

Deepak R Khemani

5 years ago

These are landmark guidelines, lets hope that the draft actually turns into reality. All of these if actually implemented will go a long way into making Mediclaim a patient friendly scheme rather than an Insurance company friendly scheme which it now is, the best regulation which is proposed in my opinion is the doing away with the contribution clause, this was a source of harassment if a customer had policies with different insurers.
Kudos to the Moneylife team, carry on the extraordinary good work and we shall support you in your efforts to make the average Indian's voice to be heard.

REPLY

nagesh kini

In Reply to Deepak R Khemani 5 years ago

If insurance turns out to be more insurance co.friendly the insureds can't forget getting any claim settlement and the companies bumper profits more than 100%. Co-pay is another big hoax to cheat insureds - New India has for Jaslok Hospital Mumbai as a policy condition.

mk

5 years ago

UNION BANK ISSUES HEALTH INSURANCE MORE AS A NUISANCE VALUE WITH PREMIUM!

FOR LAST 5 YRS. IN A ROW, UNLESS I WRITE TO CMD, I NEVER GET REMINDER TO RENEW, I HAVE TO CAJOLE THEM TO RENEW, THE POLICY ALMOST NEVER COMES, THE CARD COMES ANYWHERE FROM 10 MONTHS TO AT LEAST 4 MONTHS INTO THE INSURED PERIOD.

WILL IRDA BOTHER TO ENSURE BASIC CUSTOMER RESPONSIBILITIES ARE MET BY ALL & SUNDRY WHO COLLECT PREMIUM (LET IT BE CHEAPER/EVEN FREE!!!), IF NOT SO-CALLED CUSOTMER SERVICE THAT JUST ABOUT DOES NOT EXIST IN THIS COUNTRY ACROSS ALL SPECTRUMS OF GOODS & SERVICES THOUGH WE PAY THROUGH THE NOSE, SO-CALLED MONEY-MAKING MACHINE CREATED BY CHIDAMBARAM CALLED """""""""""SERVICE TAX""""""""""IN A COUNTRY WHERE WE PAY A HEFTY, FAT, LEECHY 13% (DIS) SERVICE TAX TO A GOVT. WHICH JUST DOESNT BOTHER ABOUT ANYTHING EXCEPT SPENDING MONEY ONLY ON PHONY/FAKE/TEETHLESS CREATURES LIKE "JAGO GRAHAK JAGO"....!
saarey jahna se achha, hindustan hamara.....JO BILKUL HI NAHI HAI!

Babubhai Vaghela Ahmedabad 9427608632

5 years ago

http://goo.gl/2ErJi
Deny Mediclaim to the Newborn till he / she gets 3 month old is unjustified. When parents of newborn has a valid mediclaim policy, the infant also must be covered under mediclaim immediately once born. Premium for the newborn should be accepted by Insurance Company say two months before birth. In any case, the child must be covered under Mediclaim at the time of birth.

REPLY

Harsh Shah

In Reply to Babubhai Vaghela Ahmedabad 9427608632 5 years ago

There was or is a policy called Unborn Child Policy which is to be taken before 4 months of pragnancy. Note only a child is covered and not the mother in case of any complications arising to mother during the pragnancy period or delivery. To give policy to child only after 3 or 6 months is justified. The policy is given without medical Check up is a question ?

Newsviewer Exclusive
FMC finds huge disparity in open position and trade volume

The commodity market regulator says the ratio of open position with the volume of trading in some commodities is very high compared with international practices in national exchanges

New Delhi: Commodity market regulator the Forward Markets Commission (FMC) has found huge disparity between the ratio of open interest and the volume of trading in some commodities traded on five national commodity exchanges, reports PTI.

In futures market, 'Open Interest' is the number of outstanding contracts that are held by market participants at the end of trading day. Globally, trading volume and open interests go hand-in-hand on exchanges.

"The Commission has done a preliminary analysis ... And it has been observed that the ratio of open position with the volume of trading in some commodities is very high as compared to the international practices in national exchanges," the FMC said in a circular.

The disparity indicates that the day trading volumes and speculation are far in excess of open interest positions, which is not in line with the avowed purpose of use of commodity futures market as a hedging platform, it said.

To understand the situation better, the regulator has directed national commodity bourses -- MCX, NCDEX, NMCE, ACE and ICEX to submit month-wise and year-wise details regarding ratio of open interest with the volume of trade in the top 15 commodities for 2009-10, 2010-11 and 2011-12 fiscal in a week.

It has also asked these exchanges to submit a road map to to bring such ratios at par with the international standards.

Trade analysts said that the trend of high trading volumes and low open interest is not healthy.

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Top 895 companies increase net sales, operating profits and net profits despite margin pressures

Contrary to the gloom and doom prevailing, a Moneylife aggregation of 895 companies shows surprisingly good results for the March quarter

A majority of the companies have reported their March quarter results; we now have the data of 895 companies in the Moneylife sample of 1,150 companies whose results have come out. At first glance, sales, for the final quarter of the 2011-12 fiscal, increased by 19%, year-on-year (y-o-y), to Rs10,68,167 crore. Operating profits has increased by 12%, y-o-y, to Rs1,60,068 crore while net profits increased even more, by 18%, y-o-y, to Rs99,039 crore. This is highly impressive since there has been a severe pressure on margins. An analysis of 895 companies saw margins have actually shrunk a bit, on a y-o-y basis, at 9.27%, when compared to 9.36% recorded last year. The margins have somewhat stabilised now instead of worsening, which is good news.

Out of the 895 companies that reported results, a whopping 72.29% of the companies saw their fourth quarter sales increase over the corresponding period last year. While cost pressures continue to remain, the largest of the companies have managed to increase sales, operating profit as well as net profit, which is a positive sign of the Indian economy ability to withstand difficult times.

As many as 38% (343 companies) of the sample actually recorded higher net profit margin over last year's March quarter. The aggregate results have been somewhat skewed by the performance of a few larger companies. We will discuss the detailed performance once all the results of Moneylife sample, comes in.

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