Page 174 - India Insurance Report 2023- BIMTECH

162 India Insurance Report - Series II

the most contentious “pre-existing disease”, “reasonable and customary” charges, and “proportionate
deductions”. Transient and permanent exclusions were stated. Insurance policies now come with an
eight-year moratorium period where individuals who were continuously covered under individual
health insurance cannot be denied claims for any reason whatsoever. The Regulator has thus standardized
several aspects of health insurance to promote clarity and consistent interpretation and safeguard the
interests of policyholders. This has facilitated the Regulator to now move to a ‘Use and File’ mode
involving only certification, where insurers can design policies and launch them after obtaining the
Unique Identification Number (UIN) through filing certifications.

9. Third Party Administrators for Health Insurance Servicing

Health insurance has the highest number of grievances, and most are related to the agony a
policyholder faces at the time of claim. The first step taken by the Regulator to alleviate these complaints
and address other issues related to hospitals was the introduction of Third-Party Administrators (TPA),
who became an integral part of the health ecosystem. The stringent entry norms for the TPAs were to
ensure only credible companies were licensed to deal with this sensitive personal insurance. The duties
of the TPA were wide, ranging from aiding insurers in processing claims, settling claims from the funds
provided by Insurers, facilitating the system of cashless services to the insured, accessing hospitals,
diagnostic centres, physicians, and other health service providers to ensure minimum standards of facilities
at these centres and negotiate treatment costs commensurate with the infrastructure. The Regulator
realized that the TPAs, too, had inherent operational and systemic problems which added to the burden
of the policyholders. These included administrative and conceptual problems, lack of awareness among
policyholders about the various facilities and their utilization, over or under-utilization of the capacity
of TPAs, inadequacy of the physical presence of TPAs at service providers/hospitals, lukewarm response
to queries, delayed communication of approval of cashless by TPA to the hospitals which was exacerbated
by the fact insurers also took time to send their consent. The Authority and Insurers’ constant review of
the performance of the TPAs, coupled with the TPAs themselves investing in technology and better-
quality manpower, has ensured that they are now more professional and prompter in their services.
They have brought about much-needed relief not only to the policyholders but also to the hospitals and
the insurers. They became the effective voice of the insurers vis a vis the service providers and the
customers.

The litmus test for this entity was the handling of mass schemes of the Government, be it RSBY or
the tailor-made schemes of any state like Arogya Karnataka Scheme, Chief Minister’s Comprehensive
Health Insurance Scheme of Tamil Nadu, Biju Swasthya Kalyan Yojana of Odisha, Mahatma Jyotiba
Phule Jan Arogya Yojana to name a few. The massive job of enrolment of the masses (mostly the
deprived classes), preparing their IDs, identifying the service providers, and negotiating the treatment
costs, managing the implementation of the scheme would have been a mammoth task for the Insurers/
government without the presence of the TPAs. To address the issues of time lags pertaining to cashless
approvals, quick settlement of claims, and ensure continuity of benefits accrued by a policyholder, the
Regulator has spelt out timeliness to which insurers and TPAs must adhere.