Comment

The situation on claim payments in respect of health insurance has deteriorated significantly over the last few months. While everybody is aware about the turf war between Irda and Sebi over unit-linked insurance plans, only policyholders who have had the misfortune to get hospitalised are realising the significant issues with claim settlements on mediclaim plans.

My experience should help illustrate the point:

In December last year, I slipped and fell down at home. I was advised minimally invasive surgery to repair a tear in my shoulder. I was smug in the knowledge that I had adequate insurance. My first shock was when the doctor hiked the estimates for the procedure after discovering I had medical insurance. It was only when I threatened to shift to another doctor that he agreed to abide by the original estimate of around Rs 2 lakh.

The second shock came when I realised the hospital (a reputed one) had blacklisted all third-party administrators (TPAs)/ insurance companies and I would have to pay the bill and seek reimbursement from the insurer myself. On enquiry, I learnt that this was because of the bad experience the hospital had had with TPAs (as well as insurance companies) who delayed payment even after providing approval for cashless settlement.

A third shock came when I put in my claim with the TPA for reimbursement. First, the TPA allotted by my insurance company had given a 1-800 telephone number which was never picked up. So for any queries, I had to send a messenger over to their office, where the people were extremely rude to my staff.

At wit’s end as to the status of my claim, I discovered, almost by accident, that the TPA had an online status check facility (a facility not advertised anywhere in the policy documents). I monitored my status constantly, and in early January 2010, found out that the TPA had raised several queries including requiring a copy of the FIR filed for the accident (but who on earth files a FIR for slipping at home?) and a copy of the indoor case papers of the hospital.

This query was only updated online and I have yet to receive a physical letter for the same. In any case, I got together all the documents and submitted them in mid-January 2010. After that, it took them almost four weeks (they updated the approval on the site on Friday, February 18) to approve my claim after making some nonsensical deductions.

Here is a sample list of what they have deducted:

Rs 100 for shaving (they have claimed it is for head shaving though no where in the bill is it mentioned as head shaving — it was actually chest and shoulder shaving to prepare for the operation)

Rs 200 for the warming blanket — used in the operation theatre where the temperature is low, thus necessitating the use of this blanket. The amount of the deductions is extremely small and hence, I do not plan to contest them; but the pettiness rankles.
Again, true to form, I learnt all this from the online status site. I now anticipate a struggle to get the actual cheque for the approved claim.

What are the lessons I learnt from this experience?

First, the healthcare industry (especially the larger hospitals) is a law unto itself. With a shortage of quality healthcare facilities, they have no push factor for pricing their services reasonably. Except for a few notable exceptions, most of them possibly see an easy money-making opportunity when they are treating an insured patient.

The ability of even large insurers to lay down standard payment systems is poor. The hospitals and doctors have their own woes — ambiguous terms attached to cashless pre-approvals mean the hospital is not sure whether they will be paid. Secondly, there are very long delays in payment even after a claim is admitted and approved.

Some health insurers contribute their own share to the policyholder’s woe by denying/ reducing claims on flimsy grounds, delay in decision making, etc.

This is not the first time there has been a problem. TPAs and hospitals had locked horns a few years ago, following which, the authorities had intervened to set up an arrangement which worked reasonably well, till it broke down about 6-9 months ago.

A large number of reputed hospitals have refused to entertain cashless approvals by TPAs and now the sector is crying out for the intervention of government authorities.

The lack of standardised healthcare charges is the biggest impediment to the spread of health insurance. In fact, charges for consumables — particularly expensive ones such as stents — vary from patient to patient. They may also vary considerably depending on whether the patient is insured or not!

Last words

The healthcare sector clearly has a lot to answer, and the government’s recent move to accredit hospitals and have standardisation in some of the charge structure is most welcome and needs to be implemented with full speed.

Irda also needs to intervene to push standardisation in health insurance, to ensure a policyholder’s confidence.

Till both these things happen, consumers have no choice but to grin and bear it. I hope the finance minister comes up with some proposition when he presents the Budgeton Friday.

The writer is CEO, Apna Paisa, a search comparison engine for loans, insurance and investments. He can be reached at hrdna@apnapaisa.com