Page 27 - Insurance Times January 2023

data. The IT systems in PSU insurers lacked appropriate communication is then sent by TPA to the policyholder/
validation checks and controls, undermining the smooth network provider giving details of claim amount admitted,
functioning and reporting system. It is observed that the IT amount deducted along with reasons and details of electronic
systems are not designed to capture all required fields, data transfer. General insurance policies are annual contracts and
captured is not complete, and systems are accepting multiple customer loyalty is rather fickle. For a majority of customers,
entries and had issues regarding data integrity. whether retail or corporate, price is the sole criteria.

This has resulted in lapses such as multiple settlement of Claims Management System
Redirection
claims, excess payment over and above the sum insured plus to manual
Claims Insurance
evaluation
bonus, excess payments due to ignoring waiting period clause Healthcare Information
ECP
Providers System
for specific diseases, non-application of copayment clause, SYSTEM
Denials/ Notification
breaching of capping limit for specific diseases, incorrect Approvals of the results Claim
Management
Claim Service
assessment of admissible claim amount, irregular payments Office
on implants, non-payment of interest on delayed settlement Fraud
Insured Detection
etc. Health insurance policies are annual contracts and Office
customer loyalty is rather fickle.
For a majority of customers, whether retail or corporate,
Areas of concern:
price is the sole criteria. The value of its distribution networks
is equally febrile, since most intermediaries only go by the The Compliance Audit Report on 'Third Party Administrators
remuneration paid by the insurance company-the highest in Health Insurance Business of Public Sector Insurance
commission payer gets the business, despite the fact that Companies' has been prepared under the provisions of Section
there are regulatory norms about intermediary 19-A of the Comptroller and Auditor General's (Duties, Powers
remuneration. and Conditions of Service) Act, 1971 for submission to the
Government. The Audit has been conducted in accordance
Type of Claims: with the Regulations on Audit and Accounts, 2007 (revised in
August 2020) and Compliance Audit Guidelines of the
Claims of health insurance policyholders are of two types viz.
Comptroller and Auditor General of India. The Audit covered
cashless and reimbursement. In a cashless claim, policyholder
the period from 2016-17 to 2020-21.
avails hospitalization treatment, either for planned surgeries/
procedures or unplanned/ emergency treatment from
The Report is based on the scrutiny of documents pertaining
network provider or non-network provider. In cashless claims,
to four PSU insurance companies. Claim processing activities
the network providers claim payment from the insurers and
the policyholder need not make payment. In reimbursement
claims, the policyholders make payment to the hospitals/
nursing homes and claim reimbursement from insurance
companies. Intimation to insurer or TPA is mandatory for
registration of a claim.

Claim administration includes claim intimation, registration
of claim, allotment of unique claim control number by insurer
and TPA, verification of credentials of patients hospitalized
and policyholders' identity, providing cashless and
reimbursement services, scrutinizing of claim documents
submitted by the policyholder or hospitals/ nursing homes,
deciding on the admissibility of the claim under the terms
and conditions of the policy, and recommendation by the TPA
for settlement or repudiation of claim. Claims recommended
are uploaded by TPAs along with the claim details for insurer
to verify and sanction payment as well as effect payment to
the policyholder or network provider, as the case may be. A

The Insurance Times January 2023 23