Patients are often taken for a ride by ignorant and unethical Third Party Administrators, and hospitals with different rate cards. Will this harassment end?
By Deepa Gupta
Deepali Jain’s mother was suffering from cancer. She was under corporate cover with an insurance company, which footed all her bills in the first year of treatment. However, in the second year, it refused to pay up. Despite repeated mails to the Third Party Administrator (TPA), it refused to relent and strangely, wanted Deepali’s mother to prove that she was being treated for cancer. “All this, when her tests always included the cancer marker!” says an exasperated Deepali.
So what was the problem? The doctor on the panel of the insurance company did not think those tests were necessary. Was he an oncologist? No, he was a general physician. A shocked Deepali says: “I was fighting incompetent people with no knowledge whatsoever of policies despite being part of the insurance system.”
After more than a year of back-and-forth mails, queries and explanations, Deepali finally managed to get a small part of the claim. But the mental torture she went through was enough to put her off insurance; she has now stopped sending bills for claim.
Welcome to the world of TPAs. Meant to ease matters for patients, they are the vital link between insurance companies, patients and hospitals, but do precisely the opposite. They often delay payments to patients, make them wait endlessly and then, fork out far less than what the hospital bills came up to.
No wonder, Anurag Goel, a consumer, says that health insurance in India is a fraud. “When my 82-year-old father was in hospital for more than a week, the concerned TPA did not move his papers, nor did it send it to the hospital in time. They promise one sum on paper and give out peanuts on the other. It’s a sham,” he says.
Insurance companies have engaged TPAs to cater to the needs of their customers. At the time of claiming a reimbursement for health bills, the consumer lodges his claim with TPAs, who, in turn, process it as per policy terms. Thereafter, approval for payment is sought from the insurance company. Once the insurer concurs with the recommendation, claims are settled or rejected. However, what is happening is that TPAs work in the interests of insurance companies, so that they either don’t pay or pay as little as possible.
However, Sandhya Singh, another consumer, decided to take on these companies. When a particular health insurance company refused to foot the bills, she filed a case in the consumer court. “Win I did, though it took ten years,” she says. “But the satisfaction of bringing these crooks to book and making them pay much more (along with interest) than what they otherwise would have paid, was great.” Even in court, the insurance company kept up its errant behavior by postponing hearings, not appearing in court, etc. But Sandhya was adamant. “Someone needed to tell them that they can’t have their way and cheat people,” she says.
While insurance companies have been causing harm to their own reputation by their hostile attitude when it comes to paying claims, TPAs, too, are hand-in-glove with hospitals to rip off patients, they allege. An article in Forbes in 2010 said that “TPAs need to be more efficient to justify their existence”.
While their modus operandi is to ask query after query in a genuine case, they often do not detect fake submissions. Satish Mohan, another consumer, says: “An employee of my organization got himself admitted in hospital when pain from a kidney stone resurfaced. He stayed put there for two days for getting all his tests done without having to pay a single penny. Surgery did not happen either. The TPA easily passed his claim, whereas my genuine one was stuck.”
Lok Adalat is a major thrust area in UP. UPSLSA, under the National Lok Adalat, has cleared 2.1 crore cases between June and December 2014.
However, such cases could be few in future. Sanjay Seth, executive vice president, IFFCO Tokio General Insurance Company Ltd, Gur-gaon, says that presently there are dual schemes for handling insurance claims—in-house TPAs in offices and outsourced TPAs. This enables “us to give a choice to our customers. They can choose a TPA they are more comfortable with so that there is no trouble at the time of reimbursing a claim,” he says. Universal Sompo General Insurance Company, Mumbai, too, has a dual model. Dr Amitoj Singh, head, health vertical, says: “One TPA deals with several insurance companies. We felt that our customers were being neglected. So an in-house TPA worked best for us.”
Many insurance companies find the in-house model easier as it works in their favor and prevents them from getting a bad name. Singh worked in a TPA for seven years and reveals that TPAs can’t have medical specialists on board due to the affordability factor. And it is for this reason that it cannot interfere with a medical claim and is bound by the prescription of a specialist, says Singh.
Seth says that while insurance
companies come under the Insurance Regulatory and Development Authority (IRDA) and work with specific guidelines, there is no regulatory body that checks doctors and hospitals. “The entire fabric has gone dirty. Hospitals have different rate charts for customers with health insurance policies.”
Singh, too, views the entire TPA-hospital nexus as “ethically wrong” and says that strict measures need to be put in for the benefit of the common man. Suresh Sugathan, head, health insurance, Bajaj Allianz General Insurance, Pune, says: “Having an in-house TPA ensures customer satisfaction and brings standardization in decision-making so that public expectations are addressed more effectively. The guiding principle of an in-house claims management team is fair judgment and empathy.”
However, TPAs have a different story to tell. Says Dr Suman Singh Tilak, VP, Paramount Healthcare Services, Delhi, says: “A majority of the complaints registered at various agencies, be it consumer forums or the IRDA, pertain to retail policies (individual policies like Medi-claim meant for a single person). These are different from corporate policies, which are tailor-made with a wider coverage than retail policies. They account for only about 5 percent of complaints as compared to 95 percent from retail policies.”
People go for costly treatments based on medical insurance
Asked why hospitals always have different rate charts for people covered under insurance in the retail and corporate sectors, Gopal Verma, chairman and managing director of E-Meditek Group of Companies, Gurgaon, says: “It is an industry issue. Hospitals are not regulated by insurers, TPAs or insurance regulators. Only volume-based discounts or special package rates can be negotiated, which is why there are GIPSA (General Insurance Public Sector Association), PPN (Preferred Provider Network) or GIPSA-approved rates based on the category of the hospital and city. This could have resulted in double pricing practice by hospitals.”
The way out, he says, is through product evolution. Here, benefits are linked to the sum insured and the class of city/hospitals. Disparity in pricing is a major cause of concern. He states that the last health guidelines from IRDA tried to address some of these issues but the regulator did not intervene in the pricing of the insurance product and commercial arrangements bet-ween the insurer, TPA and the hospital. With there being no health regulator, hospitals are out of the preview of the insurance regulator.
Verma says that current TPA service charges of less than four percent average (including group and retail policies) are inadequate to deploy a high number of specialists on a full-time basis. “A better TPA evaluation model and methodology will encourage insurers to reward them in a much better way, so that they can afford better professionals, infrastructure and technology for higher satisfaction among policy holders,” says Verma.
It will indeed take some time for this logjam to be cleared.
— Names of consumers have been changed to protect identity