Wednesday, February 17, 2010

Mediclaim ,TPAs,etal

 The newspapers reported that doctors have blacklisted TPAs( Third Party Administrators)  over fees which have remained unpaid for months.

This was expected-what is surprising is that it took so long in coming or rather happening like this.The TPAs were appointed to process & settle mediclaims .This was done, when the General Insurance Industry came up with a golden handshake or rather the VRS scheme some years back.The idea was to outsource claim processing to TPAs to make up for the staff which will be reduced because of the VRS .That  the VRS was announced to accommodate TPAs or the other way around is a wild guess.Maybe, for a change, somebody ( read Finance Ministry ) does believe in entrepreneurship of the TPA kind !

Only mediclaim was outsourced to TPAs as it forms a substantial chunk of the Urban Non Traditional Business ( UNTB) portfolio.The TPAs have proved true to their name.They behave like Third party -going about the work of settling claims as if they are not concerned at all.This is because the mediclaim policy is between the insuring public & the insurer.TPAs will send letters citing deficiencies in the mediclaim documents,give flimsy reasons for rejecting claims,& most of all take months to settle claims, if any.Their correspondence is a fertile ground for litigation. The  first reason for rejection is given in one letter followed by another letter citing another cause  for denial of claim & so on till the customer keeps writing to them.This is so only if the TPAs are corresponding at all.In many cases,they do not bother about such basics.

It has been alleged that TPAs misutilise funds which are given to them for settling claims.This is due to the reason that they keep on citing lack of  funds as the cause of non settlement of claims .So,the insured feel that the insurer is not giving funds to the TPAs.This is seldom true but TPAs stick to their stand embarrassing the insurers no end.

The TPAs have employed a lot of people who have taken VRS from the general insurance industry & it is they who process the claims nah are the reasons for the grievances of mediclaim policy holders.But it appears that the directions given by the TPA management is one of causes if not the only one for so many mediclaims landing up in the numerous consumer foras.

The TPAs are supposedly trying to posture themselves as crusaders for the rights of the mediclaims policy holders against the doctors & the hospitals.The hospitals & doctors are also a party to the mess that is there for all to see.Many times,needless tests are advised just to charge exorbitantly & then distribute amongst  all in the medical fraternity.After all ,it is one gigantic brotherhood even sisterhood ! Hospitals have also refused to rationilse the various charges for room,operations,tests etal on a uniform basis.Many times, surgery is advised as equipment for the same has to be used. Otherwise the point of acquiring it at a high cost will be lost.This has been admitted by an eminent doctor.It is a matter of turnover for the hospital or rather the machine ! Also,quite a time ,the post operative care hardly exists & makes matters worse.Many doctors have no concern & their neglect leads to fatalities which causes pain & suffering.It is known to one & all that the moment a person lands at a hospital,the first query is about insurance.If insured,the rates are higher  compared to the unsinsured person.

So all in all, it is the policy holder who suffers & obviously the insurer ( the Company ) .All this is bad publicity for the General Insurance industry.There is a vast market for mediclaim in our nation but if things continue like this,people will be wary of buying mediclaim.

The fights amongst the customers,the insurer,the TPAs ,hospitals & doctors are clogging our already saddled courts of justice.This can be avoided & should be so.The orders when they are delivered are economically injurious to the Company as high interests  have to be paid .Moreover, such cases take a lot of time in the judicial foras who can use the same time for deciding other issues far more important than mediclaim.Most of the issues which land up in court are all technical & can be settled by the various players but there is an attitude to play safe & approach the courts.

The TPAs have faulted on many counts & they should not be allowed to get away so easily.After all,the General insurance industry is bearing the brunt of all this backlash for allowing the TPAs so much leeway for doing a shoddy job.The industry must opt for in house TPAs which will comprise their own staff .They were better as earlier experience has shown .If the TPAs have to continue then,they ought to be trained to process claims in a better manner .Moreover, there has to be regulation for the medical establishment as well.The doctors cannot behave that they can charge us the earth because we got ourselves medical insurance !

The failure of TPAs is a major blow for outsourcing other insurance businesses on the agenda like Motor insurance  .If this succeeds,it will pave the way for giving another handshake leading to weeding out  excess staff.This is the way forward  for disinvestment from the insurance sector  for the Government as per directions of the World Bank.

But one good thing about medical insurance -it is the best incentive to keep your health in an excellent condition.This is so, as many  mediclaim insured have learnt the hard way, that most, of the times,the claim/s will be rejected !

Please also read this blog post about health care in US @


Secured People to People lending - P2P Lending said...

Really there should be a change in the way these claims are "begged" for!
We could copy the more efficient system abroad where a photo insurance card is given to the policy holder which he uses at the various hospitals . He only pays the doctors fees and all the rest is billed to the Insurance Company claimed directly by the hospital.So they cash outflow is minimal from the policy holder. Ofcourse this necessitates a lot of clarity about the types of payments between the insurance company and the Hospitals.
This is followed by many countries wonder why we cant do that?


Read with a red face!
Always thought, Medclaim was very effective and efficient in providing individuals (including families) umbrella health coverage. Even my Health Provider (an Institute) had professionals who advocated it; But I never followed suit.
Now I know how I bypassed frustration by chance. Indeed my 'hands on' experience of General Insurance stopped at counting the pinnae of milch animals brought over to an officer who fixed 'the COVER' to Dairy-owners. No thought had then crossed my mind about a dictum in Marathi suggesting: CAN'T SEE HEAVEN WITHOUT RESTING OWN LIFE'. I see the axiom too optimistic.
Paralysed in ideation, lacking in fresh originality, I'm unable to think of corrective actions. Yet this Blog is a good beginning, I think.

Aarti said...

Excellent piece of insight! Had little idea that TPAs had unleashed such a lot of misery for mediclaims!

Tony said...

When you are looking for health insurance or a private medical insurance plan, to ensure you get the best possible cover for all the major medical conditions and cancer it is important to consult with a specialist health insurance intermediary.

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