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Problems with TPA

• The medical condition of the member is never declared correctly most cases
during purchase of the policy.
o During the pre-authorisation process the TPA recevies information that
has been "filtered" by the member, the doctor and the hospital.
o The large number of rejections at many large hospitals is due to
misdeclarations by the member, treating doctor and the hospital.

• There are mistakes committed by half educated ayurvedic, homeopathic and


doctors with little medical knowledge.

• There has to be transparency of information between the members, hospitals,


TPA's and the insurers. Else, all TPA's will err on the side of rejections.

• Industry experts rue that there is no regulatory body to keep a watch on healthcare
providers. Also when a person buys a policy, no HIV test is done. Besides, the
pre-medical tests are also minimal.

• A research done by the IRDA showed that : TPAs across the country on
conditions of anonymity (for fear of losing business with hospitals) admitted that
inflated medical bills is a countrywide phenomenon. A city-based TPA which
detected a number of frauds in medical bills of reputed city hospitals and nursing
homes complains that doctors conspire with their employers manipulate medical
bills to make the most of mediclaim policies.

• Severe competition has brought down the price of corporate policies, eroding the
actuarial premium base. Therefore skewed claims ratio is also due to corporate
mediclaim policies.

• The claims ratio is 200 per cent in case of pampered corporates, especially IT
companies. These companies are insured for everything such as fire insurance,
marine insurance, assets such as computers and servers besides medical insurance
of their employees. The insurance company makes good profit obtained as
premium from these products and is so willing to bear the loss obtained from
health insurance product."

• Hospitals too have problems with TPAs.

• Each hospital has its own policies. The matter of charging a patient is between the
doctor and the patient. But every hospital should standardise the doctor's fees."

• Hospitals face, timely payment issues with the TPA. Many excuses cited by TPAs
are bureaucratic. They cite reasons such as miss-spelt names and hospital
signatures.
• Many TPAs don't mention in their authorisation letter the pre-existing illnesses
because of which claims will be disallowed. They don't reimburse after the patient
has used our services saying it's a pre-existing illness. Once a letter is issued, the
TPAs should not back out.
• TPAs have a fast turnover of employees and poor infrastructure and response
time, all TPAs do not have a 24-hour helpline, which they are obliged to."

Solutions
The work of TPAs, at present is done by the surveyors, inspectors, retired insurance
officers and partly by doctors who are ultimately hired for medical opinion. Now this
work should be handed over to the TPAs who can have their own medical boards and
inspectors to bring efficiency in the system.

TPA as intermediary should share the premium of Mediclaim customer at least by 10-15
per cent to provide better customer care service. There should be a standard agreement
MOU format between the General Insurance Company (GIC) and TPAs. The hospitals
can sign an MOU with TPA on the standard format. It cannot be two agreements for two
TPAs and one insurance company or hospital.

The TPAs need funds to issue I-cards, customer education brochures and run a call centre
for customer queries or emergency calls. TPAs should work on behalf of an insurance
company and the administrative expenditure should be borne by an insurance company.
Development of a good customer care attitude will definitely give a boost to Mediclaim
business and provide quick relief to the policy holder.

The TPA must keep a list of basic permissible charges under the Mediclaim policy for
ready reference. This charge list can differ from city to city as the charges can differ from
hospital to hospital. The law of an average can take out the basic permissible charge list
from city to city. What about the premium? It is same throughout India. Can it differ from
city to city?

If not, why pay heavy Mediclaim bills in Mumbai or Delhi and why less in Jaipur or
Chandigarh? The argument “that it is with in the limits of sum assured” is against the
economy of a Mediclaim policy. It seems there is a big anomaly between the premium
received and uneven payout for a Medical Claim. It requires the basic permissible
charges throughout India if the premium has to stay at one level. The principal of uniform
premium and uniform payout should be adopted. The customers should be educated on
these lines.

There should be no clash between the TPAs and the hospitals if this uniformity is
announced. In our country the Law of Average stands better than the Law of Actual. The
patient is reimbursed the stipulated actual or average charges, whichever is less.
The hospitals will fall in line for business if they know the charges cannot be inflated or
manipulated. There should be no time for registration. One thing the hospitals want to
avoid is unnecessary dragging in every case of a claim and if there is a claim it should be
paid within 30 days. Each hospital should submit a list of services and minimum charges
acceptable every two years. This will provide a database for the TPA and insurance
companies. By using the Law of Average, a data base can be prepared for minimum
charges offered under the Mediclaim policy from city to city.

Uniform premium for uniform claims should be the overall criteria. The excess amount
should be payable by the insured. City Compensatory Allowance can be added for an
extra premium.

The role of TPA is really great as intermediary between every complaining customer and
the conservative insurance companies but for the proper allocation of funds for the TPA
and money drain situation. It will be TPAs who will do the running for the sick customer
and bring relief or claim to his or her residence.