Moneylife » Personal Finance » Insurance » IRDA comes up with landmark draft health insurance regulations
IRDA comes up with landmark draft health insurance regulations
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| 31/05/2012 07:14 PM |
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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Comment
Jitendra Gupta 3 months 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 3 months 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 1 year 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 1 year 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 1 year ago
Great work by Gaurang Damani! Yeoman service to We the People.