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Wednesday, March 03, 2021

Health cover scheme: Who, how

With model tender papers out and a key meeting today, PM Health Protection Mission heads for an August launch. Whom does it cover? Which states are part of it, how will it work in states with their own schemes?

Written by Abantika Ghosh | New Delhi |
Updated: June 14, 2018 12:10:19 pm
Health cover scheme: Who, how Beneficiaries will be selected based on deprivation criteria, occupation categories.

It was a really long journey for Vinita Devi from her village in Giridih to the Tata Memorial Hospital in Mumbai.

After a lot of tests came the diagnosis, finally. It was acute myeloid leukemia – “high risk in view of p53del and 5qdel,” said the TMCH report. She needed to be given chemotherapy. The final discharge summary however said: “Family has opted for supportive care in view of financial limitations.” Her husband Dipu Thakur, a barber in the village, had gone way beyond his means to take his 37-year-old wife to Mumbai for treatment. The couple have three sons and one daughter that they recently adopted because they do not have a girl.

The family came back to Atka in Jharkhand and started her on Ayurvedic medications.

It is fates such as these that the Pradhan Mantri Rashtriya Swasthya Suraksha Mission aka National Health Protection Mission seeks to avoid, by giving an annual health cover of Rs 5 lakh to 10.74 crore families. With the first meeting of the Ayushman Bharat-NHPM Council slated for June 14 and the model tender documents just out, preparations clearly are entering the last lap. Nobody though will yet talk about an August 15 launch.

A look at what the ambitious mission will look like.

Who are covered

The National health Agency headed by a full time CEO will be the nodal agency for the implementation of the programme. States and Union Territories will devise their own modes of implementation – the one suggested by the Centre as a model is through state health agencies (SHA). They can use either an existing trust or society or not for profit company or a state nodal agency or can set up a new entity. Like in case of the National Health Mission, responsibility for the implementation of NHPM will lie with the states. It is their call whether they choose to implement through a trust model, an insurance model or in the mixed mode.

Right from the beginning, the issue of branding for the mission – that has been lovingly referred to as Modicare by ministers and BJP functionaries – has been a thorny one. That is why a “consensus “ was reached that for states that already have a health scheme running, AB-NHPM would enter the state as an “alliance” with the state programme. So in Telangana, Ayushman Bharat will be in alliance with Aarogyashri, in Tamil Nadu, it will be in alliance with the Chief Minister’s Comprehensive Health Insurance Scheme and in Maharashtra it will be in alliance with the Mahatma Jyotiba Phule Jan Arogya Yojana.

The funding for the scheme will be shared – 60:40 for all states and UTs with their own legislature, 90:10 in NE states and the three Himalayan states of Jammu and Kashmir, Himachal and Uttarakhand and 100% Central funding for UTs without legislature.

The states are also free to continue with their own health programmes. That would take care of the concerns of states like Maharashtra about the existing beneficiary list already being bigger than what the SECC data entails. The “dovetailing” means that if as per SECC data, 2 lakh people in the state are covered by NHPM, while the state scheme already has 3 lakh people, the Centre would pay 60% of the premium amount for 2 lakh people. For the state it would mean some savings. For states particularly ambitious and willing to pay it is even possible for them to make the beneficiary base additive, at least theoretically. It also means that Naveen Patnaik has not only stolen the Centre of bragging rights by announcing a Rs 5 lakh health scheme, a time may soon come when 60% of that premium amount is paid by the Centre.

There will be 100% portability within the country. Package rates of the hospital where benefits are being provided will be applicable while payment will be done by the insurance company that is covering the beneficiary under its policy. State Governments will enter into arrangement with all other States that are implementing AB-NHPM for allowing sharing of network hospitals, transfer of claim & transaction data arising in areas beyond the service area.

READ | Ayushman Bharat to be rolled out in alliance with state health plans

Centre & states

Several states have already finalised their memoranda of understanding with the Centre – which not just means that they are a part of the mission but their mode of implementation is also now sealed. The states about which the AB secretariat – still functioning out of Nirman Bhawan but soon to move to the Red Cross Building – have “no idea” are West Bengal, Delhi, Odisha (the state announced its own Rs 5 lakh health scheme on Tuesday), Punjab and Karnataka. Karnataka is still in a state of flux with a brand new government. West Bengal which had made some of the most belligerent noises about opting out of the scheme when NHPM was announced, has, according to sources, cleared the file at the bureaucratic level. However with chief minister due to travel to China later this month there is no telling when that file may receive the political go-ahead. Both Bihar and Uttar Pradesh have in principle said that they will be a part of the scheme and will implement it through a trust. “They have had some bad experience with insurance companies in RSBY,” said an official.

So far 14 states have signed the MOUs. Of these the ones that will use a trust model for the mission are Andhra Pradesh, Telengana, Madhya Pradesh, Assam, Sikkim and Chandigarh. Gujarat and Tamil Nadu have opted for mixed mode implementation. Implementation in trust mode would mean a setup like the Central Government Health Scheme where bills are reimbursed directly by the government without any third party. In the insurance model which is how RSBY started its journey, the government pays a fixed premium to an insurance company which then pays the hospitals.

Health minister J P Nadda while addressing a press conference on Monday about the achievements of Modi government for the last four years said that 12 more MoUs are likely to be signed on June 14 when the NHPM council meets for the first time. Modelled after the GST council and chaired by Health minister J P Nadda, the council will be the federal forum for states to voice concerns. All state health ministers have been invited for the first meeting.

Who are in, who aren’t

So far, 14 states have finalised their memorandums of understanding with the Centre. Health Minister J P Nadda said Monday that 12 more MoUs are likely to be signed at the Council meeting Thursday.

Andhra Pradesh, Telengana, MP, Assam, Sikkim and Chandigarh will use a trust model while Gujarat and Tamil Nadu will use “mixed mode implementation”. In a trust model, bills are reimbursed directly by the government. In an insurance model, the government pays a fixed premium to an insurance company, which pays the hospitals.

Officials in the Ayushman Bharat Secretariat are uncertain about West Bengal, Delhi, Odisha, Punjab and Karnataka. West Bengal had initially made noises about opting out. Bihar and Uttar Pradesh have in principle said they will be part of the scheme and will implement it through a trust.


As is the case with any health scheme in India, the first signs of trouble for NHPM have been around the question of money. The initial Niti Ayog estimate of Rs 1082 premium per family per year was rejected by insurance companies in the initial consultations when they held that nothing less than Rs 2500 is feasible. However estimates have “rationalised” since then but the NHPM tender has come with a catch. In category A States the administrative cost allowed is 10% if claim ratio less than 60%, 15% if claim ratio between 60-70% and 20% if claim ratio is between 70-80%. In Category B States administrative cost allowed will be 10% if claim ratio is less than 60%., 12% if claim ratio is between 60-70% and 15% if claim ratio is between 70-85%. The document also lays down that for a claim ratio of up to 120 percent states will not pay any additional premium. If the claim ratio is beyond 120% the state will pay 50% of the additional premium. The rest will have to be borne by insurance companies.

For the purpose of administration of the scheme states have been divided into categories A and B. Category A states include s Arunachal Pradesh, Goa, Himachal Pradesh, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, NCT Delhi, Sikkim, Tripura, Uttarakhand and 6 Union Territories (Andaman and Nicobar Islands, Chandigarh, Dadra and Nagar Haveli, Daman and Diu, Lakshadweep and Puducherry). Category B state includes Andhra Pradesh, Assam, Bihar, Chhattisgarh, Gujarat, Haryana, Jharkhand, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Odisha, Punjab, Rajasthan, Tamil Nadu, Telangana, Uttar Pradesh, West Bengal.

It is now however private hospitals which are up in arms against the package rates that have been announced. The 1350 packages that have been announced have been found to have lower than CGHS rates and private hospitals have made no bones about their unhappiness. Ever on the ball, the AB secretariat has responded with an analysis of rates comparing CGHS in Delhi with NHPM, Mukhyamantri Amrutam rates in Gujarat, Chief Minister’s Comprehensive Health Insurance Scheme rates in Tamil Nadu and the Bhamashah Swasthya Bima Yojana in Rajasthan.

Says Dr Dinesh Arora, director AB-NHPM, “We analysed the rates for three specialities – cardiology, cardiothoracic surgery and ophthalmology. The comparison showed that for almost all the rates the median rate was comparable when one included NHPM in the analysis. Besides there is a provision for 10% increase for NABH certification (entry level) 15% for NABH accreditation, 10% each for hospitals in rural areas and for teaching hospitals. So in all for an NABH accredited hospital in a rural areas these rates can go up by upto 35%, theoretically. Practically there would be a 20% margin on average. We are not really looking at private hospitals that charge Rs 15 lakh for dengue. We want service oriented hospitals.”

That is also why concerns about “moral hazard” procedures have been repeatedly raised in stakeholder consultations. Moral hazard” in health insurance parlance is the tendency of people who are insured to buy/be sold additional healthcare interventions irrespective of their actual needs leading to expenses that do not necessarily add to their own health or wellbeing but bleeds the insurer. Sector experts have been cautioning about potential moral hazard challenges in NHPM since it is essentially a tertiary care programme. Though Ayushman Bharat has a preventive health component in the form of health and wellness centres, the two are de-linked.

Fraud detection

With the NRHM scam not so long back, the government is very keen that the scheme that prime minister Narendra Modi hopes will bear his name for posterity has a very strong mechanism to ensure that the scheme is not milked by unscrupulous service providers. That is why in the model tender document uploaded on Tuesday night 636 of the 1350 packages or 47% of all treatments covered require pre-authorisation. This includes all packages for cardiology, ophthalmology and oncology. Many procedures including emergency ones are government hospital only.

There is also the provision of medical audits by the insurer – 5% in every empanelled healthcare setup. The audit would look at whether the medical records file is complete, whether there are detailed notes of the patient’s progress and also the pathology and radiology reports. “If at any point in time the SHA issues Standard Treatment Guidelines for all or some of the medical/ surgical procedures, assessing compliance to Standard Treatment Guidelines shall be within the scope of the medical audit,” the model document says.

Taking off from the CGHS experience when many private empanelled hospitals walked out of the scheme citing payment delays, there are also stiff penalty provisions for any delays on the part of insurer or the state health agency (SHA) either in paying premium or in processing claims or refunds to the state. If claim payment to the hospital is delayed beyond 15 days, insurers will have to pay an interest of 1% for every seven day of delay. If premium refund is not made by the Insurer to the SHA within 30 days of the communication for refund there will be 1% penal interest for every week of delay. If the premium is not paid to the insurer, by the SHA within 6 months of the commencement of the AB-NHPM, insurers will get an interest of 1% of the premium amount for every 7 days’ delay.

IT platform

For a scheme of this scale, the I-T platform is crucial. That is why one of the latest deadlines is for the IT platform to be finalised – what health minister J P Nadda on Monday called “IT stabilisation.” An MoU has already been signed with Telangana for scaling up of the Arogyashri IT platform. Arogyashri is among the oldest running tertiery care health schemes in the country. The three main features that got the platform a go-ahead were beneficiary identification, hospital transactions and claim management. Moreover the Telangana government owns the IPR and has transferred it to the Centre through the MoU. It is also currently in use in Andhra Pradesh and Tamil Nadu. By July 30 it is expected to be in launch mode.

However for the long run, the search is on for an even better, state of the art solution. According to a senior official Niti Ayog is working on it, they are also consulting various experts such as Nandan Nilekani. Former UIDAI chief J Satyanarayan too has been appointed as an advisor. Centre fir Development of Advanced Computing (CDAC) and NIC too are helping.

This is a submission for the Health Systems Global Media Fellowship.

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