31 insurers, 26 TPAs seek to fix rates for surgical procedures

Mumbai: In a bid to rationalise settlement of health claims, 31 general insurers and 26 third-party administrators (TPAs) have come together to fix rack rates for common surgical procedures such as cataract, hernia, appendicitis removal, kidney transplants, and angioplasty.

While hospitals will still need to agree to the recommended tariffs, general insurers are confident of pushing through standardised rates with most hospitals. The standardised pricing will also help patients as despite having insurance they have to bear some expenses out-of-pocket.

Insurers said that arbitrary pricing by private hospitals is hurting patients and insurers. A fairly common cataract operation results in bills varying from Rs 25,000 to Rs 3.5 lakh — depending on the hospital, treatment, doctor and implant lens.

For more complicated surgeries like a kidney trans

In a bid to curb rising medical costs, 31 insurers, 26 TPAs come together to fix rates for procedures like cataract, appendicitis removal, kidney transplant, and angioplasty plant, the variation could be from Rs 5 lakh to 12.5 lakh. This bid to ensure parity and fair pricing is now being driven by the IRDAI, General Insurance Council and insurers.

The General Insurance Council, an association of insurers under the aegis of the regulator, has formed a committee to prepare a preliminary list of commonly claimed surgeries. Over time, the committee hopes to make their rack rate list more comprehensive by adding more players.

The four PSU general insurers — New India Assurance, National Insurance, United India and Oriental Insurance — already have a similar common rack rate list for medical procedures under GIPSA (General Insurance Public Sector Association). PSUs say the higher volumes of business they bring in more than compensate for the slightly lower rates set.

“A majority of hospitals have now agreed to our rack rate, because they know we have a wide customer base and it will bring them more footfalls. Of course, some big hospitals initially stayed away. But over the years they have also come into the fold,” said Atul Sahai, CEO, New India Assurance Co. “And there are some, who have not agreed to the rates and stayed independent. If our customers decide to go there we can't stop them. We do reimburse,” he added.

IRDAI has decided to extend the PSU example for private insurers and TPAs. “Some of the smaller insurers and TPAs may not have the same bargaining capacity or clout as some of the bigger names. So IRDAI felt that it does not make sense for one hospital, for one treatment to charge 7-8 different rates depending on the insurer/TPA — so it has asked us to work on a common rate applicable to all,” said M N Sharma, secretary-general, GI Council.

Insurers expect some level of resistance from private hospitals. In Karnataka, this April, the Private Hospitals and Nursing Homes Association (PHANA) refused to honour cashless claims, inconveniencing thousands of policyholders after GIPSA decided to push its tariff. Over 400 hospitals in PHANA network boycotted cashless treatment for nearly a month. A similar situation was seen in Pune where a network of 125 hospitals threatened to discontinue cashless claims.

Insurers state that the reason they are forced to look at a common rack rate for hospitals is because of medical inflation. Year-on-year, hospitals increase charges by 10-15%, say insurers. Insurers call this “soft fraud” by private hospitals as bills for standard procedures are artificially inflated. “Ultimately, it is patients who suffer as they end up paying from their pockets despite having insurance,” said an official from a PSU.

Source: Press Reader.