Health insurance claims: TPAs to be made more accountable

Mumbai, December 12, 2015: In a bid to seek greater accountability from third-party administrators (TPAs) for processing health insurance claims, the insurance regulator plans to tighten the regulations governing them.

According to a senior official at the Insurance Regulatory and Development Authority of India (IRDAI), the revamped TPA health regulations will clearly define the purview of operations for them.

IRDAI had made it clear in the regulations that TPAs can only process or recommend claims and cannot repudiate claims.

“All correspondence with respect to repudiation or rejection of the claim can be done only by the insurer by stating valid reasons,” the official said.

Most insurers outsource claims processing to TPAs, who act as intermediaries between hospitals and insurers, to save on administrative and distribution costs. As TPAs get a commission for cutting down claims, they often question the treatment and tests the insured undergo, resulting in a reduction in the claim settlement amount.

Gaurang Damani, an activist who had filed a public interest litigation in the Bombay High Court on health insurance, said: “Insurance companies have been incentivising TPAs to reduce the bill amount and, in turn, lower their outgo.”

He also said that the regulations governing TPAs will help remove anomalies that exist in the current system, which puts the consumer at a disadvantage.

At present, the average claim amount of health insurance policies settled by TPAs is lower than those settled by in-house claim settlement teams set up by insurers directly.-BusinessLine.

Corporate Comm India(CCI Newswire) .