The insurance regulator is seeking to bring all stakeholders in the health insurance space — insurers, the insured, as well as hospitals — under one roof with an aim to standardise the claim settlement procedure and ensure payment in a time-bound manner, T L Alamelu, member (non-life), Irdai, said on Friday.
Irdai has also formed a committee to look into the matter, and the platform will be developed by the Insurance Information Bureau.
“We hope this will bring a paradigm shift in the way claims are settled in health insurance,” Alamelu said. She was speaking at an insurance summit organised by Assocham in Kolkata.
The current system of claim settlements is routed either through a third-party administrator (TPA) or an in-house team. Normally, it takes about a month to get such claims settled. Both the processes have their own advantages and drawbacks. For example, for cashless settlements, TPAs often have tie-ups with a large number of hospitals, which eases the process. On the other hand, the in-house settlement process takes less time, as communication is direct between the insured and the insurer.
With the proposed common portal, not only would the communication between different stakeholders be seamless, but also it would lead to standardisation in the whole process.
Alamelu said the idea was to have cashless claims as well as reimbursements routed through the common portal.
“All claims will be settled via this platform. This will give rich wealth of data, apart from standardising settlements and ensuring that settlements are done within a specific period in time,” she said.
Irdai has been moving towards standardisation in health insurance for quite some time. Recently, it asked insurers to offer the standard health insurance product, Arogya Sanjeevani Policy, before the April 1 deadline. Arogya Sanjeevani will have basic mandatory covers, which will be uniform in nature. The premium may be set by insurers on their own.
The regulator is also in the process of standardising the charges for certain common procedures. At present, there is a huge disparity in charges of same procedures by different hospitals. Also, Irdai has expressed concern over rising hospital costs.
"There is a mismatch (in pricing). Irdai is thinking how to handle it. In this context, the General Insurance Council's talks with TPAs are on course to standardise charges for some procedures such as cataract and hysterectomy," she said.
“It has been noticed that hospital inflation at present is 10 per cent to 15 per cent and tariffs are being changed on a regular basis…There is nobody to check that," Alamelu said. Irdai is also planning to let customers choose their TPAs, she added.
Meanwhile, Irdai is planning to come out with a second window for proposals under the sandbox mechanism.
The first window for submitting applications was open for around 30 days in the months of September and October.
The regulator got 173 proposals, of which the majority pertained to wellness and use of technology in health insurance. Many proposals involved using fitness apps for determining premiums.
“We are also looking for more disruptive sort of policy. There will be a second window, may be some months later or year later. It should cover a huge population and is also simple,” she said.
Regulatory Sandbox usually refers to live testing of new products in a controlled environment, wherein regulators may permit certain relaxations for the purpose of testing. It is similar to a pilot project and the insurer is free to withdraw the project in case it fails, provided it doesn’t affect customers who have already purchased it.