Policyholders will have to wait a little longer to get clarity on issues that are plaguing the TPA-doctor relationship
The issues over administration of cashless facilities provided by insurers for hospitalisation between city-based doctors and third-party administrators (TPAs) who facilitate medical insurance, have yet to be resolved. Policyholders will have to wait a little longer to gain more clarity on these issues, as both TPAs and the medical community have still not come up with any concrete provisions.
According to the Association of Medical Consultants (AMC), TPAs have been giving out impractical ideas for implementation, while TPAs claim that doctors are being stubborn.
In March, miffed over low rates and unpaid dues from TPAs, about 1,500 nursing homes and various doctors under the AMC banner had decided to boycott TPAs completely. This drastic measure meant that patients in hospitals covered by these TPAs could not avail of cashless facilities.
“Talks (between TPAs and doctors) will still take time and with TPAs not giving us anything to go with, one can’t predict how long would these talks take to conclude,” says Sudhir Nayak, honorary secretary, AMC.
According to Mr Nayak, TPAs are trying to push discount offers based on the number of patients admitted to a hospital and a policy of ‘best-preferred’ hospitals. Both these TPA schemes have been rejected by doctors. According to the discount offer policy being pushed by TPAs, hospitals would get a 10% concession if they were to provide Rs10 lakh of business; the best-preferred hospitals scheme will see TPAs choosing 50 hospitals for working with them.
“How can you ask hospitals and doctors such things? We can’t provide them such business on a regular basis. It won’t be fair on the profession. And the best-preferred hospitals scheme will definitely not go down well with nursing homes. Only those who have good relations with TPAs will be on the list,” says Mr Nayak. He also adds that this scheme is not feasible.
However, Dr Nayan Shah, managing director, Paramount Health Service, says that these policies are being preferred by some hospitals. “It’s a business and some hospitals are looking for some kind of concessions. It all depends on the hospital,” he said.
However, Mr Nayak also argues that TPAs have been misinforming their customers and payments have not been coming on time.
In the midst of this, corporate health insurance is become an expensive business for insurers. Premiums have shot up, but claims are also going up. Many industry experts believe that health insurance companies are in a lose-lose situation.
“The claims ratio in the corporate group health insurance segment is over 100% in most cases,” said Balaji C, Bharti AXA’s head of underwriting.
He also added that insurance companies are trying to manage the cost of claims, putting in place better customer service and opting for in-house TPAs. Private insurance companies like ICICI Lombard and Bajaj Allianz have done away with TPAs. By the end of this year, Future Generali will have its own in-house team to service health policies, instead of making customers deal with TPAs for facilitating medical insurance payouts.
“TPAs have not been able to live up to the service standards that had been expected from them when they were introduced. For us, as an insurer, it would be better if we have our own team which can interact both with the customers and hospitals directly, to ensure that our clients are getting prompt service,” KG Krishnamoorthy Rao, Future Generali India’s managing director and chief operating officer, had earlier told Moneylife.
During the past 30 days, the share price of Reliance Industries is falling continuously, despite some good news coming out from the company. What are the reasons?
The Supreme Court verdict on the Reliance Industries Ltd (RIL) and Reliance Natural Resources Ltd (RNRL)'s five-year fight and the prospect of a downgrade of RIL’s D-9 block has affected the share price of RIL over the past one month.
During the past 30 days, the weekly average price of RIL has fallen to Rs1,028 from Rs1,102 despite some good news coming out from the company. For FY10, RIL’s total revenues crossed the Rs2 lakh crore mark; it made a fourth discovery in the Cambay basin in Gujarat; the company announced a joint venture with Atlas Energy and also invested some money in Deccan 360.
“Although these (developments) were good news for RIL, there is no material impact of it on the share price. More so, the good news was evened out by downgrade of RIL’s D-9 block and there is the Supreme Court verdict expected next week, which may be a trigger point for the company’s share price movement,” said Saeed Jaffery, research analyst, Ambit Capital Pvt Ltd.
Last month, independent evaluator Hardy Oil and Gas PLC, a partner of RIL, evaluated a cut in the estimates in the company’s D-9 block by 51% following the first well in that block turning out to be dry. Hardy Oil said that the D-9 block in the Krishna-Godavari (KD) basin off the Andhra Pradesh coast, is likely to hold about 5.2 trillion cubic feet of gas compared with the earlier estimate of 10.6 trillion cubic feet.
Earlier this month, the company announced its fourth discovery in the Cambay basin in Gujarat. “The discovery is significant as this is expected to open up more oil-pool areas, leading to better hydrocarbon potential within the block,” the company said in a statement. Analysts, however, said that the discovery and its potential have already been factored into RIL’s share price.
Mr Jaffery said, “Although the discovery is good news, we have still not been able to quantify the same and cannot put any value on it. Since the discovery or potential of the field has already been factored into the share price, we do not expect the share price to react."
There has been relatively less exploration effort in other blocks and little news flow on RIL’s plans for its large inventory of discoveries as the company is more focused on KG-D6 in terms of both development and litigation. However, with exploration efforts moving up, and after the Supreme Court ruling, the company could surprise the market with more concrete plans for other KG-D6 discoveries and other discovered blocks, said an analyst who does not want to be named.
For FY10, RIL's total turnover rose 37% to Rs2 lakh crore from Rs1.5 lakh crore, while its net profit increased 6.1% to Rs16,236 crore. However, during the same period, its gross refining margin (GRM) fell to $6.6 per barrel from $12.2 per barrel. The company said during that period, light-heavy crude differentials were at their lowest in the past few years, while the Middle-East distillate cracks were under pressure due to industrial activity, low demand from the transport sector and high inventory.
“During the quarter to end-March, RIL clocked average GRM of $7.5 per barrel, significantly below our estimates of $9 per barrel. Premium in Singapore margins narrowed to $2.5, the lowest level seen in the past four years. However, the impact of lower-than-expected GRM was offset by strong volume growth of 111% to 16.7 million tonnes per annum (mtpa), which indicates refinery utilisation of 108%,” said KR Choksey Shares and Securities Pvt Ltd, in a report.
Speaking about the petrochemicals (petchem) business of RIL, where the company's margins increased 14.4% against 13.9% in the previous quarter, the brokerage said that robust domestic demand is building expectations of strong consumption in the coming quarters for the company.
"However, once the new large petchem plants in the Middle-East and China start operations, higher product supplies will put pressure on margins. Nevertheless, in the short term, strong domestic demand, coupled with planned maintenance shutdowns at crackers will continue to maintain healthy petchem margins," KR Choksey added.
Rohit Nagraj, research analyst, Prabhudas Lilladher Pvt Ltd, said that the brokerage believes that the worst is over for refining and it expects refining margins to improve hereon. "Near-term worry on the ongoing battle between RIL and RNRL continues to remain a concern," he added.
Next week, the apex court is likely to announce its verdict on the natural gas price war between RIL and RNRL. Last year in July, the Bombay High Court had asked RIL to supply 28 million standard cubic metres a day of gas to RNRL at $2.34 per million British thermal unit for 17 years. RIL then moved the Supreme Court alleging that the High Court had erred in deciding quantity, tenure and price of gas supply to the power plants owned by RNRL or its units.
Although no one is willing to speak on the record, some analysts believe that looking at the earlier judgements of the apex court, which were filed challenging the High Court orders, one gets a feeling that the verdict may not be positive for RIL.
According to the ministry, the ore should be conserved and it is currently being exported at very cheap rates
Steel minister Virbhadra Singh today said that his ministry will seek prime minister Manmohan Singh’s intervention for banning export of iron ore to protect the domestic steel industry, reports PTI.
“The ministry feels that iron ore should be conserved. We are exporting it at very cheap rates. The ministry will write to the prime minister, requesting him to ban its export,” Mr Singh said in the Rajya Sabha during Question Hour.
The government yesterday hiked export duty on iron ore lumps by 5% to 15% to discourage its shipments and cool down the prevailing prices of the vital input for making steel. The export duty on iron ore fines would remain unchanged at 5%.
Mr Singh said that his ministry is planning massive expansion of steel-making utilities in the country and exuded confidence that India will achieve a production target of 120 million tonnes per annum by 2012, almost double the current production.
“In 2009-10, against the domestic crude steel capacity of 72.76 million tonnes, the production of finished steel is 59.69 million tonnes and domestic consumption of finished steel is 56.48 million tonnes. We expect the production of steel to go up to 120 million tonnes by 2011-12,” he said.
The minister also said that these trends indicate that domestic steel production capacity is higher than the current demand for steel in the country.