Deception in Mediclaim

The headlines  in the Times of India dated today said  that many hospitals are off the Mediclaim radar as many are supposedly involved in false claims.There are related reports about increase in consumer cases because of rejected Mediclaims &Hospital  charges being too exorbitant.

The insurance companies have resorted to denial of cashless facility. All this has led to a lot of hardships for the patients .Obviously after the fleecing by hospitals & TPAs,insurance companies have become bereft of cash - so cashless has suddenly got a new meaning ,for the Insurance Industry that is !

It has been reported that Hospitals have indulged in putting up fraud claims in collusion with TPAs ( Third Party Administrators)  to whom processing of  health related claims has been outsourced by the Insurance Companies.Patients are also said to be  a party to the frauds.TPAs are a recent phenomena unlike hospitals which have been in existence much before.TPAs came in, when the Public Sector Insurance Companies announced the VRS ( Voluntary Retirement Scheme) some years back.The staff shortage due to VRS was tackled by outsourcing processing of health related claims to TPAs.

But the Insurance Companies seem to think that TPAs are doing a good job.Hence,the axe has fallen on the Hospitals. This is not to say that Hospitals are clean but to question this blacklisting of Hospitals.The TPAs ought to be taken to task .But instead of that, a TPA has investigated & based on that investigation ,Hospitals have been listed out.This is giving new meaning to the term " natural justice." Natural justice demands that no one should be a judge in his own case.In this instance,a TPA is the investigating agency & based on that ,so many are blacklisted.How can a TPA sit in judgement on other TPAs as also Hospitals ? The report omits to state if any TPAs have been blacklisted but still,this is all an eye wash.

What are the credentials of the TPA which investigated the fraud claims ? The said TPA is a later entrant compared to some  TPAs .As happens sooner than later,the said TPA may be involved in bigger frauds or maybe get involved later.Perhaps, it wants a clean slate to begin.After all,aren't we  too familiar with the brands which worked hard to get the  ISI marks & once,they got it,it has just been downhill ever since.

The report also says that many Hospitals are in the dark about their status & some Hospitals have themselves opted out of the list due to strict norms.The insurance industry will soon inform its decision to the listed Hospitals but " soon" in Public Sector parlance can range from days to months to years ! So ,the stage is set for disputes about Hospitalisation in blacklisted hospitals as neither the TPA,nor the patient or the Hospital knows the current status of the Hospital.

Related reports speak about the rising number of consumer disputes about Mediclaim.About two thirds of all Insurance claims end up in consumer forums.This is a very sorry state of affairs.Claims are rejected for flimsy reasons like pre-existing ailments,excluded diseases,etal.Moreover,in Public Sector,decisions ( if any ) to delay & reject claims are lauded .Such actions also keep the bosses in good books of the audit & vigilance departments.The executives are preventing the drain of wealth thereby protecting the funds.But when the judgement comes,generally interest payment is also a condition But such small things do keep happening in big Public Sector companies.So,no one gets wiser.

It has been stated in the  report that one can choose the TPA.But this is easier said than done.Many compnaies have only some TPAs on their rolls.So this may not be economical .Moreover,if I want a particular TPA,it may be taken to mean that I want to conspire with the TPA to defraud the Insurance Company.Moreover,how does one know if any TPA is good ,bad or ugly ? Many will tell you that all TPAs are chips of the same block.

Mediclaim is a drain & has been so for a long time.With the TPAs in it now,it has started burning huge holes in the pockets of the  Insurance Companies. So what is the way out ?

One way is to start in house TPA cells manned by the employees of the Insurance Companies .Some private sector companies have set up such cells for processing Mediclaims.The TPAs should be strictly monitored as well, as before the TPAs came in,there were no such blatant attempts at cheating.Unfortunately,the TOI report seems to suggest that TPAs or rather the investigator TPA is calling the shots ! The said TPA Manager has spoken to the press & the Insurance Companies have no spokesperson to tell about their version /s  ! One really wonders " Who is the boss -the TPA /s or the Insurance Companies ? The more things change,the more they remain the same or perhaps change for the worse.On second thoughts,we haven't yet hit the pits ,not yet !

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 @ http://sunithakrishnan.blogspot.com/2010/03/curious-case-of-american-health-care.html