Bombay HC had asked IRDA to come up with package rates for 42 ailments based on policyholder’s sum insured and type of hospital. GIC has intervened to be part of the PIL. They have expressed difficulty in implementation of pre-packaged rates due to the lack of hospital regulator
The Bombay High Court (HC) has issued notices to 25 non-life insurance companies offering health insurance seeking pre-packaged rates for 42 ailments on the basis of sum insured and on the type of the hospital. HC had earlier directed Insurance Regulatory and Development Authority (IRDA) to come up with package rates for 42 standard ailments in the policy document. IRDA put the ball in health insurance companies court and hence General Insurance Council (GIC), a statutory body representing all non-life insurers intervened to made party to the public interest litigation (PIL) filed by activist Gaurang Damani on issues facing mediclaim policyholders.
According to Mr Damani, “If mediclaim policies indicated the amount an insured was eligible for specific ailments, it will ensure that they have clarity on which hospitals to go; the hospitals too would know how much they would get.” Packaged rate for standard procedures specified in the policy will force the insurance companies and third party administrators (TPAs) to become more transparent about what they are willing to pay, avoiding nasty surprises for the policyholder later. Today, going to preferred-provider-network (PPN) does not ensure complete coverage for hospital bill, even if there is no sub-limit for the said procedure and even when the policyholder has availed room facility within its room-rent limit.
GIC agreed that there should be uniformity in packages offered in insurance policies. They emphasised the need to have hospital regulator as there is no standardisation in the hospital charges. Mr Damani argued that there was a provision in the Clinical Establishments (Registration and Regulation) Act to appoint a regulator to regulate the hospitals. Unfortunately, IRDA has not appointed such an authority.
According to Mr Damani, “The good old cashless mediclaim days are no longer available with government insurers, who realised it was more expensive than reimbursement claims. There is no financial incentive to restart cashless facility. Information on package rates for 42 standard procedures will help policyholders know what they are entitled to. Today, there is lack of transparency and third party administrators (TPAs) have huge discretionary powers. Bills for same procedure undergone in the same hospital are settled with different amounts.”
The next hearing is scheduled for 28th November.
Read – Mediclaim packaged rates for 42 ailments will marginalise TPAs' powers
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What made GIC, the holding co. of all the PS insurance companies, intervene?
IRDA has been wrongly claiming that anything that had to do with medical service providers is outside 'their purview' - this is indded an absurd and untenable stand. They have everything to do as it concerns millions in health-related claims.
The IRDA needs to get the MOF to instruct the MOH to activise the Health Regulator and this is no big deal!
The PSU in-house TPA will soon appear and we no longer need the TPAs.