Govt. pays ₹140.64-cr. insurance dues

Private hospitals had threatened to stop treatment under the Karunya scheme

The threat by private hospitals to stop treatment under the Karunya Aarogya Suraksha Paddhati (KASP) from July 1 following the huge backlog in payments has forced the government to sanction ₹140.64 crore to the State Health Agency (SHA) to clear the dues.

The government had sanctioned the amount on June 11 itself to the SHA, to be paid to Reliance General Insurance Ltd. (RGIL), the insurance company contracted under the KASP. However, the amount was not transferred to RGIL till date.

This is not the first time that the SHA has delayed the payment of premium due to the insurance company, despite releasing funds. At least on two occasions last year, the funds released by the Finance Department towards KASP premium had been parked by the SHA in the zero-interest escrow account of a private bank for over a month, till hospitals threatened to stop patient care.

The Kerala Private Hospitals Association (KPHA), in a letter to the Health Minister two days back, pointed out that hospitals empanelled under the KASP were in dire straits because of the non payment of the claim amount due to them from RGIL. The KPHA said the claim amount due to hospitals ran into ₹200 crore or more, which included pending payments in 2019-20 as well as 2020-21, after the KASP was extended by the government for a period of three months from April 1 to June 30, 2020.

It said that many private hospitals were facing severe financial crisis because of the COVID-19 pandemic. The KPHA said that RGIL was unable to make claim payments because the government had not paid the premium. The ₹140.64-crore sanctioned is only part of the ₹175.17 crore due as premium from April 1 to June 30 this year. Sources said the government was yet to pay a backlog of approximately ₹60 crore for the year 2019-20 also.

The contract with RGIL was to have ended on March 31. The government in between removed Comprehensive Health Insurance Agency of Kerala as the implementing agency and put the SHA in charge. The SHA changed the KASP from insurance model to assurance model, wherein instead of the insurance company, the government will directly make claim payments.

However, with the SHA yet to launch the insurance scheme for the current year, the government had to request RGIL to extend the 2019-20 KASP scheme till June 30 this year.

Source: The Hindu