Page 41 - Insurance Times August 2023

functioning and reporting system. It is observed that the IT Claim administration includes claim intimation, registration
systems are not designed to capture all required fields, data of claim, allotment of unique claim control number by insurer
captured is not complete, and systems are accepting multiple and TPA, verification of credentials of patients hospitalized
entries and had issues regarding data integrity. and policyholders' identity, providing cashless and
reimbursement services, scrutinizing of claim documents
This has resulted in lapses such as multiple settlement of submitted by the policyholder or hospitals/ nursing homes,
claims, excess payment over and above the sum insured plus deciding on the admissibility of the claim under the terms
bonus, excess payments due to ignoring waiting period clause and conditions of the policy, and recommendation by the TPA
for specific diseases, non-application of copayment clause, for settlement or repudiation of claim. Claims recommended
breaching of capping limit for specific diseases, incorrect are uploaded by TPAs along with the claim details for insurer
assessment of admissible claim amount, irregular payments to verify and sanction payment as well as effect payment to
on implants, non-payment of interest on delayed settlement the policyholder or network provider, as the case may be.
etc. Health insurance policies are annual contracts and
customer loyalty is rather fickle. For a majority of customers, A communication is then sent by TPA to the policyholder/
whether retail or corporate, price is the sole criteria. The network provider giving details of claim amount admitted,
value of its distribution networks is equally febrile, since most amount deducted along with reasons and details of electronic
intermediaries only go by the remuneration paid by the transfer. General insurance policies are annual contracts and
insurance company-the highest commission payer gets the customer loyalty is rather fickle. For a majority of customers,
business, despite the fact that there are regulatory norms whether retail or corporate, price is the sole criteria.
about intermediary remuneration.
Areas of concern:
Type of Claims: The Compliance Audit Report on 'Third Party Administrators
Claims of health insurance policyholders are of two types viz. in Health Insurance Business of Public Sector Insurance
cashless and reimbursement. In a cashless claim, policyholder Companies' has been prepared under the provisions of Section
avails hospitalization treatment, either for planned surgeries/ 19-A of the Comptroller and Auditor General's (Duties, Powers
procedures or unplanned/ emergency treatment from and Conditions of Service) Act, 1971 for submission to the
network provider or non-network provider. In cashless claims, Government. The Audit has been conducted in accordance
the network providers claim payment from the insurers and with the Regulations on Audit and Accounts, 2007 (revised in
the policyholder need not make payment. In reimbursement August 2020) and Compliance Audit Guidelines of the
claims, the policyholders make payment to the hospitals/ Comptroller and Auditor General of India. The Audit covered
nursing homes and claim reimbursement from insurance the period from 2016-17 to 2020-21.
companies. Intimation to insurer or TPA is mandatory for
registration of a claim. The Report is based on the scrutiny of documents pertaining
to four PSU insurance companies. Claim processing activities
in the health insurance
business of PSU insurers is
largely outsourced to
Third Party Administra-
tors, to have better exper-
tise, specialization in pro-
vider interface, medical
adjudication of claims and
technology driven cus-
tomer service. The Audit
was taken up considering
the significance of the
health insurance portfo-
lio, the need for having
systems and procedures
for empanelment, alloca-

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