After allowing portability under health insurance in 2011,insurance regulator Irda is soon coming up with a separate health insurance claims settlement regulation.
This would address issues arising out of claims not honoured by the insurers in a time bound manner. Presently there is no separate provision for the health insurance claim settlement.
Acting on a recent Bombay High Court order,the Insurance Development and Regulatory Authority (Irda) is working on a draft regulation and it is expected to be put up on the regulators website for comments and suggestions by April 30,2012.
Guarang Damani,a Mumbai-based insurance activist,had filed a public interest litigation in February,2011 against Irda which said there are a great deal of inconsistencies and violations in the health insurance industry,which are directly detrimental to the interests,health and financial well being of crores of Indian consumers. The fight between the hospitals and insurers and their third party administrators (TPAs) should not impact consumers,it said.
A division bench of Chief Justice Mohit Shah and Justice Roshan Dalvi after hearing the petition had last month said in its order,It is expected that the IRDA will display the draft regulations for healthcare on its website as expeditiously as possible and preferrably by April 30,2012.
There are currently over 7 crore health insurance customers with a total premium of Rs 11,000 crore. Out of the four public sector general insurers,New India Insurance incurred a loss of Rs 422 crore in FY11 and the rest were making profits. Out of the 15 private non-life insurance companies only two made profits. The net loss of the general insurance industry was Rs 1,019 crore for the last financial year.
There have been number of cases where insurers were accused by the customers for denying,delaying or reducing claim amounts deliberately.
In 2010,the four public health insurance companies,commanding over 60 per cent of the total market,struck off a large number of hospitals from their Preferred Partner Network (PPN) in almost all metros. PPN hospitals provide cashless medical facility under the health insurance policy. Insurers alleged that there were hospitals which were hand-in-glove with the patients in inflating the medical bills,with some TPAs also being involved.
However,Damani said,We have documentary evidence of some insurance companies providing incentives to their TPAs to lower the amount claimed by a customer. Experts,however,doubt the need for a new set of regulations when there are mechanisms the Irda has developed to deal with claims.