United India Insurance makes a mockery of PPN package rates

In a strange case, the TPA of United India approved cashless hospitalisation as per a package rate for preferred provider network. But the network hospital billed the insured more than 120% of the approved amount, making a mockery of PPN package

Moneylife Foundation Insurance Helpline received an email from Jyothi Gopal (name changed) about a strange case. United India Insurance third party administrator (TPA) Vipul MedCorp approved a cashless expenditure for her of Rs25,000 for appendicitis surgery. But United’s preferred provider network (PPN) New Hope Indian Speciality hospital billed the insured for Rs65,368.

“I have taken United India Insurance Family Medicare Policy. My son developed sudden stomach pain in June 2012 and had to undergo surgery for appendicitis immediately. I have a floating insurance cover for Rs5 lakh. Though I had insurance cover with same company for almost 12 years, I never approached the company for a single claim. The network hospital billed us for Rs65,368 for the surgery and TPA approved cashless only for Rs 25,000. I made several representations to TPA - Vipul MedCorp and sent many mail communications, visited them and visited United India branch several times. But they kept on dragging the issue. Finally, they sent me a claim repudiation letter in January 2013. I approached United India divisional office three months ago. But, they have informed me that I should approach Ombudsman office as they are helpless since TPA refuses to oblige.”

The question is what is the purpose of the insured going to network hospital if the TPA/insurer approves cashless for less than half of the hospital charges? If the TPA/insurer has really negotiated the package rates with the network hospital, the insured does not have to pay from own pocket.

Vipul MedCorp’s cashless authorisation letter clearly states that the approval for cashless is as per PPN package rate. It adds, “Hospital must collect the excess amount directly from the beneficiary (NOT APPLICABLE FOR PACKAGE RATES).” What is the purpose of TPA letter specifying these words in highlighted capital letters? The case shows that the purpose of PPN hospital is defeated. Why does the insured have to suffer?

Ms Gopal is one of many such victims of partial claim settlement even after availing of services in a network hospital. The hospital room rent was within the limit for the policy and the appendicitis surgery does not have any sub-limit. What is the value add provided by TPA if there is a colossal difference in what it agreed with the PPN hospital for package rates and what the hospital is charging the patient? Why is New Hope Indian Speciality hospital even part of the Government insurance companies PPN?

According to one insurance broker firm, “The true value of a package with network hospitals is that the TPA / Insurers ensure that they charge as per the agreed package rate. They should not make the insured pay the difference between hospital actual charge and package rate. Where the insured is made to pay such difference he is entitled to have the same reimbursed by the TPA / Insured if there is no sub limit in the policy.”

New Hope Indian Speciality hospital bill includes surgeon’s fees of Rs15,000, assistant surgeon fees of Rs5000 and anaesthetist fees of Rs5000, which itself equals the TPA package rate of Rs25,000 for appendicitis. Who is supposed to pay for the hospital bill charges for room, operation theatre, medical supervision, nursing charges, lab charges, pharmacy, doctor visiting charges, laparoscopy charges, ECG and Injection? The TPA and hospital agreement for package rates seems to be just a farce.

Moneylife wrote to TPA Vipul Medicare as well as United India Insurance officials, but there was no response. Can Insurance Regulatory and Development Authority (IRDA) help to ensure that hapless mediclaim policyholders are not taken for a ride due to package rates disagreement between TPA/insurer with its own PPN hospital?

It’s an irony that financial advisors tell customers to buy adequate mediclaim cover as part of proper financial planning. The customer buys Rs5 lakh cover thinking that they have covered their risk. But after paying premium for 12 years, the policyholder is repaid with a nasty surprise of TPA/insurer paying less than half of the hospital bill.

The question that United India should introspect is whether it would have treated corporate mediclaim customer the same way? Corporate mediclaim customers are often rolled a red carpet with additional benefits like maternity and cashless treatment at hospitals where retails customers are kept out. It is because a retail customer does not have any bargaining power. The insurer gives a damn if the policyholder wants to renew the policy or not.

Ms Gopal alleges that the divisional office of United India stated that they are helpless since the TPA refuses to oblige. If true, then it is nothing but a mockery of the system. When did the TPA become so powerful that they can overrule the insurance company which employs them? Hopefully, TPA’s will be cut to size soon since the new health insurance guidelines to be implemented in October 2013 by keeping them away from claims settlement. Insurance companies will be made answerable to the reasons for claims denial/partial settlement. They can no longer hide behind the veil of TPA.



Vijay Kumar Agarwal

2 years ago

Why does the insured have to suffer is my question too !! I'm also a victim to such a conspiracy between the Insurer-TPA-Hospital.

For Laparoscopic Cholesystectomy (removal of gall bladder) the hospital gave an estimate of Rs. 150,000/- for which the cashless pre-auth approval from the Insurer/TPA was only Rs. 66000/- ( less than half of what the hospital quoted) and clearly mentioned that Non Payable amt is Rs. 84,000/- ( reason being, excess of agreed package rate) !! I was totally shocked and surprised !! I had to cancel the surgery and had to undergo mental agony and more of sufferings, and finally got it done at another hospital for Rs. 70,000/- which was fully settled by the TPA as per agreed package rate with the hospital.

As an Insured person, we pay the insurance premium only to the Insurance company and not to the TPA.. then why is the insurer shifting the burden of replying to our correspondences to the TPA whom we never know unless they play such acts of wrong doings.

Its a high time that such a practice be brought to the notice of the IRDAI, the IGMS, the health ministry, etc and put a stop to such over charging by the hospital and denial by the insurer to pay the hospital charges when the final bill is within the Insurance limit of the insured.


2 years ago

I am myself a victim of PPN. I do not know the meaning of PPN but my claim was rejected due to PPN. My son was hospitalised for a surgery. I spent Rs 63,000/- and the TPA by cash less settlement allowed only Rs 33,000/-. I have filed a case in the Ombudsman at Bhubaneswar.


3 years ago

It is a sheer mockery wherein in spite of mediclaim policy the insured has to pay from his pocket thereby defeating the purpose of having such policy.

IRDA should immediately review the same and withdraw this unwarranted clause.

Hardikkumar Thakar

3 years ago

My name is Mr. Hardikkumar Thaker I am from Mahesana, Gujarat

I also suffered with UIIC and its TPA MEDSAVE. MEDSAVE's Inspector Visit the hospital and asked for a wrong persons (my agent name) name instead of hospitalized person name and then submit the paper on the name of agents and they (both) closed the file saying patient was not hospitalized and claim is wrong this companies were not reading the papers submitted by insurer and their inspectors.

IRDA have to create some guidelines and rules in favor of customers because this companies and govt firms are working on middle class customers only.

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EGoM may finalise fresh bidding norms for mega power projects soon

The decision is expected to speed up the process of inviting bids for proposed UMPPs in Chhattisgarh (Sarguja), Odisha (Bedabahal) and Tamil Nadu (Cheyyur)

A top ministerial panel headed by Defence Minister AK Antony is likely to meet again during the first week of August and may finalise fresh bidding norms for ultra-mega power projects (UMPPs).


UMPPs are coal-based generation projects with an average capacity of 4,000MW. The new bidding norms will apply to Case-II projects.


The decision is expected to speed up the process of inviting bids for proposed UMPPs in Chhattisgarh (Sarguja), Odisha (Bedabahal) and Tamil Nadu (Cheyyur). The bidding process is being revised to mitigate the risk for power producers from escalation of coal prices.


The Government has so far allotted four UMPPs. The first at Mundra in Gujarat was awarded to Tata Power, which in March said that it had commissioned the plant. Reliance Power have won the others - Sasan (Madhya Pradesh), Krishnapatnam (Andhra Pradesh) and Tilaiya (Jharkhand).


The new standard bidding documents (SBDs) for Case-I projects are being drafted by the Power Ministry.


Case-I projects are where developers have the choice to decide on location, fuel and technology to be used. In Case-II, the location of the project and fuel to be used are already decided before the start of competitive bidding.


Power Minister Jyotiraditya Scindia will hold inter-ministerial consultations on the norms for Case-I after which the Case-I SBDs will be taken to an advisory group and then will go to the EGoM for final approval.


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