In order to make health insurance more customer-friendly, the Insurance Regulatory and Development Authority (Irda) today released an exposure draft on standardisation in health insurance. It attempts to bring uniformity in health coverage practices, including the exclusion of disease conditions and charges across the policies.
"In order to address the expectation of public more effectively, the authority intends to standardise/streamline important aspects triggering health insurance complaints," the regulator said on the initiatives proposed in the exposure draft.
A standard nomenclature for critical illnesses has been proposed for both hospitals and insurers to follow, so that customers do not face any difficulty while taking a policy. Cancer, coma, first heart attack, kidney failure and organ transplant are some of the diseases mentioned in critical illness category. The regulator has allowed certain exclusions of disease conditions and procedures in 11 critical illnesses including skin cancer and HIV induced diseases.
Customer also face problems while hospitalisation, since they are not aware of the expenses excluded in such indemnity policies. To curb this anomaly, Irda has proposed that a standard list of exclusions in such hospitalisation indemnity including areas like baby food, internet charges, diaper charges.
The regulator, however, has allowed the companies to include the excluded items of payment based on product design or as part of hospital expenses. While defining hospital the regulator mandated that a facility should have at least 10 inpatient beds in towns having population less than 1 million and 15 inpatient beds in towns and cities having population above 1 million to treat the patients under health coverage.
The exposure draft called for standardising billing formats and enabling mapping of hospital information systems to specific data requirements of the Insurance companies for faster claim processing and enhanced analysis of data. This is based on the recommendations of the committee constituted by FICCI with purpose of looking at standardizing the billing procedures in various hospitals to avoid any ambiguity between the health insurance stakeholders.
The committee had representatives from all stakeholders including insurers, third party administrators (TPAs), providers and consultancy companies and was headed by S L Mohan, Secretary General, General Insurance Council. The committee has suggested that the bill is expected to be in two formats, one would be the summary bill and the detailed breakup of the bills.
It suggested that the summary bill the provider has to mention the service tax number in case they charge service tax to the insurance company/TPA among others. Further, it suggested that in detailed breakup of bills, the date on which the service is rendered is to be mentioned in the bill. Some providers have outsourced the pharmacy to external vendors. For implementation, the committee has suggested that a central body for maintenance, dissemination and addition of billing codes should be formed.
In terms of TPAs, Irda has proposed that the TPA shall only process the claim to facilitate the insurer to take decision on claim settlement or claims rejection, as applicable. "Only the insurer shall have the right to settle or repudiate a claim," said Irda in the draft. It has called for TPAs to process all the claims applications to the extent possible within 2 working days after receipt of the complete set of claim documents.
The regulator will make these initiatives mandatory across the industry after receiving suggestions and comments from the stakeholders, who have been given 10 days to respond on the exposure draft.
Insurance player said that this would lead to a better user experience for customers. "Customers have been wary of the multiple charges and opaque policies issued in health insurance. These guidelines, once passed, would ensure that the policies are transparent for end-users," said the health insurance head of a non-life insurer.
| * Irda has proposed a standard billing format |
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* Post adoption of this plan, FICCI constituted committee has suggested central body for maintaining of bills |
