Cashless claims: TPAs yet to finalise rates

Hospitals and state-owned insurers will take a few more days to reach a deal on resuming cashless mediclaims in all city hospitals.

"Third Party Administrators (TPAs) are yet to finalise on the rate structure. We expect them to revert next week," Max Healthcare Institute MD Pervez Ahmed, mediator for the private hospitals, said.

TPAs, or the facilitators between the insured and insurers, were expected to revert to hospitals today with the benchmark rates for hospitals, but they are yet to finalise the tariff structure.

"We are hopeful of finalising the rates by next week. Still some work needs to be done," said a TPA source, who is negotiating on behalf of the insurers. The cashless medical facility was suspended by four PSU insurers -- New India Assurance, United India Insurance, National Insurance and Oriental Insurance-- from July 1 after they alleged over-billing by certain private hospitals.

The restoration of services is taking longer than expected because at a recent meeting hospitals are believed to have quoted rates quite higher than the tariffs under the current arrangement, called preferred provider network (PPN).

At the meeting, attended by the representatives of private hospitals and TPAs, the two parties had agreed to categorise the hospitals on the basis of infrastructure availability and benchmark rates accordingly.

As such, those opting for treatment in super-speciality hospitals like Apollo, Escorts are likely to shell out more money for new premiums than those going for ordinary health centres.

For super-speciality hospitals--Max, Fortis, Apollo and Medicity--the rates at Ganga Ram Hospital will be used as benchmark for the new rate structure.

The facility at another set of hospital like Rockland, St Stephens, Holy Family, Batra and Sitaram Bhartiya, however, would be based on lower premiums.

The hospitals and TPAs have worked out package rates for 42 procedures, and they are now working out the rate structure, industry Chamber CII, which is mediating for a solution to the vexed issue said in a statement.

While corporate hospitals like Ganga Ram, Max and Medicity have given their package rates to the TPAs, Apollo and Fortis are yet to submit their rates. Meanwhile, in a reply to the Lok Sabha, Minister of State for Finance Namo Narain Meena said that the PSU insurers are paying 40 per cent more than the premiums collected in claims.

"The public sector general insurers have been incurring claims in excess of premium received and after factoring in acquisition costs, which are around 10 per cent, and the management expenses which are over 25 per cent, the Combined Ratio i.e. the total expenses for health portfolio exceed 140 per cent of the premium income," Meena informed Parliament.

Public sector insurance companies had to resort to rationalisation of rates for cashless facilities as they suffered a loss of Rs 2,000 crore (Rs 20 billion) because of overcharging by hospitals in Mumbai, Delhi, Chennai and Bangalore.