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My dad underwent a hip transplant last September. He was insured with one of the leading public sector insurance companies. Under the impression that he could avail of cashless hospital treatment, we took him to the Nanavati Hospital in Vile Parle, Mumbai.
On entry we were asked to make a deposit of Rs 30,000.
When asked why we had to do so since we were covered under cashless hospitalisation under our Mediclaim policy, the hospital administration said it was not comfortable dealing with third-party administrators.
Cases of customers, despite having paid additional premium for cashless treatment, failing to get the services promised are innumerable.
One reason for this is that as TPAs work with a number of insurance companies simultaneously, they do not have the manpower to deal with individual customer calls.
Many insured also complain that call centres run by TPAs are clogged too.
Tired by the litany of complaints, insurers are weaning away from the TPA model and taking things into their own hands.
The first off the block in this regard has been Bajaj Allianz General Insurance Company.
The insurer has decided to do away with TPAs and will itself handle all new and renewed health insurance policies.
State general insurers are also reviewing the performance since they appointed TPAs following complaints from policyholders and hospitals.
Bajaj Allianz has shifted the entire administration of its health insurance scheme to its own 8 to 10 member in-house health administration team.
"We will not depend on TPAs to administer health insurance reimbursement claims," says a senior Bajaj Allianz official.
The idea to give a single window service to its customers right from policy issuance to hospitalisation to claims settlement.
"We can offer significantly lower turnaround time in the settlement of claims. There has been growing concern from customers regarding the service and response time in settlement of claims," he adds regretfully.
Bajaj Allianz has tied up with over 700 hospitals and nursing homes across India for administering cashless settlement of claims. Today it services more than 20,000 individual lives and covers over 50 corporate clients, totally covering over 42,000 individuals.
It has to date been relying on the services of four TPAs -- Paramount, TT Healthcare, E-Meditek and Medsave. However, from this month hence it will undertake the entire administration of operations.
Many other insurance companies are also expected to follow suit. This is largely on account of the huge delay in receipt of identity cards (an important proof) as well as in the processing of cashless settlement of claims.
Dissatisfied customers have for some time now suggested a single-window service for policy issuing, getting hospitalised and settling of claims, thereby putting the onus on insurance companies.
"The reputation of the insurance company is at stake. This is also due to the numerous agencies and intermediaries involved in the administration of health insurance," says Bajaj Allianz executives, marketing health insurance.
Today nearly 50 per cent of the complaints against insurance companies and those with various consumer forums pertain to health insurance. Hospitals tend to inflate charges once they know that the patient carries an insurance policy.
TPAs were expected to put a stop to this, but failed. Bajaj Allianz hopes to have better control over claims.
What's more interesting, is that it has tried to bring about some amount of standardisation in hospital charges by classifying hospitals based on number of beds, size of the doctor fraternity and equipment housed.
It is not just customers but also hospitals, which indirectly are linked to the chain, and have expressed unhappiness with the current state of affairs since the introduction of TPAs.
The medical fraternity and hospital associations have also taken up their cause with the Insurance Regulatory and Development Authority against payments from insurance companies being routed through TPAs.
Hospitals fear that they are facing enormous business risk when dealing with these intermediaries, many of which do not have much of a networth.
"Direct payments to hospitals from insurance companies will help mitigate this risk completely," said M L Bhakta, president of the Association of Hospitals.
The Bajaj Allianz offer
