Medical Insurance & You

The cost of medical treatment these days, especially at the modern hospitals and diagnostic centres, depends, not merely on the nature
of illness but also on whether you have medical insurance or not. Ironically, the cost of treatment often soars the minute you admit to having a corporate insurance cover. This happens because the
average person is not qualified to ask questions and has no option but to go along with the prescribed treatment. Cash-less insurance cover is a prized perk, but the cost of treatment is cheaper for those who pay their own bills.


Elsewhere in this issue, Pankaj Kapoor explains how insurance fraud increases the cost of insurance for society as a whole. Well, add the cost of unnecessary medical treatment or diagnostic procedures to that. The problem is, most consumers, especially those who have a cash-less medical cover, do not worry about the size of their bills, and even those who are agitated often do not know their rights. Most insurance companies now work through third-party administrators (TPA) who liaise with hospitals and provide administration and database services for claims processing and settlement. The service standards and attitudes among TPAs vary widely. While some are polite and efficient and live up to their promise of making the claims process smooth, there are those who are the problem themselves - they slash bills unreasonably, cause tension and anger by delaying the processing of claims and even collude with hospitals to pad up bills. Here are answers to some basic questions about your right to demand statements or cross-check bills. An extremely savvy MoneyLIFE reader sent us these queries and ICICI Lombard helped us understand the situation better.

Q: Can a person who has medical insurance under a corporate group insurance scheme (but pays premium directly), get a statement of medical expenses from the TPA or can s/he only approach the TPA through the company? The answer is that you can do it directly (with full details about policy number and employment ID, etc.) or through the company, although the latter may be faster.

Q: Do I have the right to check for myself what my hospital charged for the treatment and how much was sanctioned by the TPA? The answer to this depends on whether you have sought pre-authorisation (which is possible for a planned medical procedure). The pre-authorisation process provides a rough estimate of the cost of treatment and the limit sanctioned by the TPA. Here too, the person insured has the right to get a detailed documentation of the billing and must approach the insurance company in case the TPA is unwilling to part with information. In most cases, the insurance company should be concerned about customer satisfaction and would intervene; but, ideally, the request for information must be escalated to the highest level within the TPA. If neither the TPA nor the insurer responds, there is no option but to complain to the Insurance Regulatory Development Authority (IRDA) or approach a consumer court.

This would happen when, as our reader suspects, the TPA has colluded with the doctor to pass an inflated medical bill. Most insurance companies do have ways of checking on their TPAs and ought to welcome feedback or a tip from an alert customer. But, often enough, the customer is stonewalled by the insurer as well.

Insurance companies lament about fraud, collusion and padding of medical bills; but as long as it affects the entire industry, they are usually happy to pass on the burden to the consumer in the form of a higher premium. It is only when the profits of a particular company are affected, by collusion or fraud by the TPA or poor service, that insurance companies react faster. Alert consumers must realise that drawing attention to insurance fraud or malpractices is a service to society, even though they may be personally unaffected by higher charges.

Ms Dalal is the Consulting Editor of MoneyLIFE. Subscribers get free help in resolving their problems with select providers of financial services. She can be reached at suchetadalal

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