A leading Mumbai-based surgeon (who prefers to be anonymous) tells the inside story about mediclaim lacuna based on real life experience. Excerpts of the interview:

Moneylife (ML): Can you share real life health insurance issues that you have come across?

A. Many insurers now insist on filing the claim in seven days. Suppose a patient gets discharged from a high-end hospital in Mumbai, the customer needs to make an application to get a copy of indoor papers. Big accredited hospitals have stringent guidelines and hence take almost two to three days to get the papers organized before they can give a copy to the patient. Imagine a senior citizen who has been discharged and his equally old wife looking after him (common scenario with kids living abroad). It is difficult for them to make rounds of hospital to get the papers. Insurance companies will ask them to produce a letter to justify the delay. Even after accepting the letter, new set of queries may be raised. You are lucky if you receive the claim payment after six months.

I personally operated my own family member for which I do not receive any doctor's fees. The claim was for other charges for implants, consumables, etc. We have an insurance scheme run by our doctors' association where the claims get settled easily because we have a clause in which the committee doctor's word is final. All the papers were organized and sent as per schedule. It took me five months to get the money back. I did not have to fight because our association personnel do it for me, but the insurance company delayed the process for three months saying the claim was filed after seven days.

There was Rs4,000 deduction for reasons like use of a thermometer, dressing material, etc. I could have easily got that money if I had fought; it was just wrong to cut money for using a thermometer. I did not think it was worthwhile to spend time on this small amount, but this is a trick wherein if you cut small amount after delaying the payment and the claimant is not in a mood to fight.

ML: Third party administrators (TPAs) have been accused of many health insurance problems. What is your take?  

A. The TPA system has spoilt everything. A TPA appoints BAMS/LCEH qualified doctors to verify the documents. Interestingly if a homeopath writes an allopathic drug he can get punished according the Supreme Court ruling for "cross pathy" practice but the same person can dictate terms to a qualified surgeon like me and question my treatment plan?
The corruption levels in TPA are phenomenal. You pay an X amount and all your bills get cleared, you do not and they will harass you no end. I will give a real example. I had a patient who needed surgery as per a MRI. The surgery was planned, but he disappeared for a few days and then came back saying he wants to do another MRI. I asked him the reason. He said he got himself insured now and wanted to claim the surgical cost; the old MRI would be a hindrance.

I told him that insurance company will not pay the claim. He said that he will bear the cost if the claim is rejected. We went ahead and got another MRI (within six weeks of the first). I told him that even if he would get a cashless approval it will be for only X amount and the rest he would have to pay. He had the same answer "Doctor, just put your total cost and I will manage the rest".

We went ahead and did his surgery. We got an approval from the TPA in six hours for an amount which was Rs50,000 more than the amount they would have sanctioned for the same surgery in the same hospital for another insured person. I was shocked. I finally asked him how he had managed all this. He simply said "Doctor, I have a car rental business and I insure all my cars with this company, so they just cannot refuse to entertain me". He had no cover when he got injured, but easily got cashless approval from the TPA for an amount higher than the procedure cost.

ML: What are some other issues with health insurance that insurers should focus on?  

A. I performed one surgery with new technology instead of longer version which would have needed hospitalisation. The patient was fine after the surgery and hence went home in eight hours. She then realized that she had a mediclaim and submitted her papers for a claim. She was refused a claim saying that she did not stay for 24 hours. I wrote to the TPA on her behalf and explained that the procedure did not require a stay and I was actually saving the insurance company a lot of money by doing a surgery like this. It fell on deaf ears. The patient's husband was resourceful and got after the TPA. He got the claim of Rs18,000 settled after eight months of fight.

Insurance companies cover cataract procedure; it shows that they are selective of which day-care procedures they want to cover. The bill for a day-care is much less than for admissions for over 24 hours. I have repeatedly asked the CEOs of insurance companies as to why they disallow day-care surgery when it is actually cheaper for them. They keep saying we are updating the schedules, but in reality nothing like that happens. Both the patient and the treating doctor are harassed to no end, which makes the patients feel that they should cheat; I fully agree with them.

ML: What can customers do take care of health expenses apart from mediclaim?
 
A. I would advise people to park some money in a mutual fund and build up a fund for medical emergencies. I agree that it would take time but once a corpus of say Rs5 lakh builds up, it would be a good tool to use against the medical illnesses.

Read first part of the interview here: http://moneylife.in/article/pharma-sales-is-the-main-business-for-hospitals/26739.html