Health Insurance continues to be one of the most dynamic and fast evolving sectors of the Indian insurance industry. Gross written premiums by insurance companies has increased from Rs.17565 cr in FY’ 2005 to Rs.59898 cr in FY’2012 showing a very healthy 19% CAGR growth. The industry has shown significant improvement in operational parameters even as claims ratios continue to remain high. However, the growth is fraught with numerous challenges including efficiency, affordability and accessibility of health insurance. The efficiency in the health insurance system is also plagued by mistrust between providers and insurers due to non-standardized practices and formats in an evolving industry. Standardization therefore is critical to enhance quality delivery of health insurance, encourage innovation and greater penetration of health insurance in the country.
Health Insurance Guidelines 2013
The IRDA recently notified the health insurance guidelines 2013 to standardize health insurance in the country. The regulator has mentioned that the guidelines are meant to reduce ambiguity and enable all stakeholders to provide better services and enable customers to interact more effectively with insurers, third-party administrators and providers. The guidelines includes various facets of standardization including definitions of critical illnesses, definitions of commonly used insurance terms, list of excluded items in hospitalization indemnity policies, billing formats, discharge summary and standard contracts between TPA, insurers and hospitals. Undoubtedly, this represents a very important milestone in ushering standardization in the health insurance sector. Let’s dwell on each of these facets to appreciate the importance of this initiative.
The Guidelines aim to reduce the existing ambiguity between the insurer/reinsurer, provider and consumer due to varied critical illnesses definitions. The differences in the definitions of Critical Illnesses adopted by the different insurers have created confusion in the minds of consumers wherein products are difficult to compare and the industry especially at the time when insurers and re-insurers have to arrive at a point where lump sum payment is made. The availability of standard definitions would now ensure better comparability and uniformity in the understanding of critical illness definitions.
Another grey area that has been addressed is the list of excluded items. As there is has been no detailed listing of such excluded expenses, and the interpretation of these exclusions is highly varied across different payers in the industry, many a times various items under the claims filed by hospital providers or individual policyholders are repudiated by the insurers but are disputed by the claimants. This is, thus, one major cause of acrimony between Insurance Companies and healthcare providers and also puts the consumer in inconvenience as out of pocket expenses goes up. The excluded items list driven by a consensus between all the stakeholders of the industry and a uniform understanding of such ‘exclusions’ would be the key for better understanding of policy conditions by the policyholders and hospitals, which would in turn facilitate speedier roll out of health insurance in the country.
Standardizing billing formats would enable mapping of hospital information systems to specific data requirements of the Insurance companies for faster claim processing and enhanced analysis of data.
This would also facilitate electronic transmission of provider bills to the payers for processing and payment. The standardized format would now be part of the standard contract between insurers/TPA and the providers. Similarly, varied Discharge Summary format specific to payers often leads to delay in processing claims as requests have to be sent to providers to provide additional information. The standardized discharge summary would now be used across providers for benefit of all stakeholders and facilitate processing of claims at the payer end. The relevant information would integrate seamlessly with standard claim form and provider bills.
The guidelines also specify the minimum standard clauses of the service level agreement entered between the Insurer and the TPA as well as agreement between the healthcare provider and the Insurer/TPA. A skeletal framework for the contract would bring uniformity, more clarity about the service standards and minimize the chances of disputes over interpretation. The document would be instrumental in streamlining other standard processes and documents like pre-authorization form, discharge summary form, bill formats, etc.
FICCI’s health insurance advisory group has developed the above standardization initiatives incorporated in the IRDA guidelines which have been submitted to the regulator over the years. This therefore marks an important landmark and achievement of the multi stakeholder consensus driven group. The effectiveness of insurance standardization will be further enhanced once the healthcare sector adopts standard treatment guidelines for common disease conditions. The group’s work in this area has been the precursor to the development of National Standard Treatment Guidelines. The Ministry of Health & Family Welfare, Government of India is in the process of rolling out the guidelines as part of the provisions of Clinical Establishment Act. These STGs were developed by eminent clinical experts facilitated by FICCI.
The release of the health insurance guidelines also marks a new journey for the FICCI health insurance advisory group which would now look at new domain areas in health insurance including combating health insurance fraud, product innovation, data analytics and promoting quality in healthcare through health insurance. The group would continue to work towards realizing an ideal universe of health insurance business with satisfied customer at its core, greater penetration of health insurance products and affordable quality healthcare for the masses.
There are other facets of standardization in the IRDA guidelines including the Standard Insurance Terms and Standard Pre-authorization and Claim form. Insurance terms continue to remain jargons for the laymen. Terms notified in the guidelines would reduce ambiguity, enable all stakeholders to provide better services and enable customers to interact more effectively with insurers, TPAs and providers. A common industry wide pre-authorization and claim form will significantly streamline processes at all stages. This will also enhance the ability of providers to obtain a timely prior authorization. By implementing it in an optical character recognition (OCR) format, the ability to transfer data from a handwritten paper based form to IT systems has been enhanced thus reducing the data entry issues for TPAs and insurers. Every company shall attach set of claim forms along with policy terms and conditions to the policyholder.
This is significant in the background of health ministry’s efforts to develop standards for making and maintenance of Electronic Health Records in the country being coordinated by FICCI. This is the single most standard tool which will help in data warehousing, monitoring and portability which would greatly reduce diagnostic time and help in creating a national health database. It should also pave the way for an all encompassing Health information portal which has detailed demographic data helping in periodic review of disease-wise, city-wise and region-wise information. Healthcare delivery would certainly be improved tremendously with all these measures.
The author wishes to thank Sidharth Sonawat, Senior Assistant Director, FICCI for his inputs.