Health insurance companies have to now communicate their cashless approvals to the hospitals within 60 minutes of receipt of authorisation request along with all necessary requirements from the hospital so that there is no delay in discharge of patients and hospital beds do not remain occupied unnecessarily. The Delhi High Court directed insurance companies and third-party administrators (TPAs) to ensure that the time taken to grant cashless approval be reduced as there were long queues of people waiting for beds because of the massive rise in the number of Covid positive patients.
The Insurance Regulatory and Development Authority of India (Irdai) in a circular to health insurance companies on April 29 has specified that the decision on final discharge of insured Covid-19 patients will have to be communicated to the network provider within an hour of the time of receipt of final bill along with all other necessary documents from the hospital. Health insurance companies will have to direct their TPAs to comply with the timelines specified by the regulator. Last year in April, the regulator had fixed a turnaround time of two hours for granting both cashless pre-authorisation and for final discharge of the insured patient.
The Delhi High Court was informed that one of the factors delaying hospital admissions is that insurance companies are taking at least six to seven hours to give approvals for discharge of patients, which is creating a time lag in fresh admission of Covid-19 patients.
Last week, the regulator had directed health insurance companies to lodge complaints against hospitals which are not granting cashless facility and insisting on cash payments from policyholders for treatment of Covid-19 despite policyholders being entitled for cashless facility under their policy. It advised insurers to ensure that policyholders are charged as per the rates agreed to by network providers and also ensure that hospitals do not levy any additional charges for the same treatment other than those rates that are agreed with the insurers. The regulator also directed the insurers to ensure that the reimbursement claims under a health insurance policy must be settled as per the terms and conditions of the respective policy contract expeditiously and issue suitable guidelines on this to all TPAs.
In health insurance, a policyholder’s claim is settled either by a TPA or the insurer’s in-house claims processing department. A TPA is an intermediary appointed by an insurance company to facilitate the settlement of a claim. For claims, a policyholder will have to inform the TPA which will seek all the bills and documents provided by a hospital to process the claim with the insurance company.
At the time of discharge, an efficient TPA will quickly process the claim and negotiate with the hospital in case of any bill-related discrepancy. A policyholder must ensure that the TPA has adequate technological capabilities and data security process in place. Insurers will only have the right to settle or repudiate a claim and the TPA can only convey the repudiation of a claim to the insured.
With the number of Covid-19 health insurance claims rising, most private insurers have opted for in-house claims settlement. In-house claims processing has quicker turnaround time and the company’s team is more empathetic towards customers. These teams can directly explain to them about expenses not covered under the policy and grievances can be redressed quickly.
However, the four state-owned health insurance companies have their own TPAs for processing claims as they do not have any in-house claims settlement process.