IRDA working to improve health insurance system

New Delhi: Insurance regulator IRDA is working on a centralised mechanism to capture health insurance data with a view to improving the service and preventing misuse of mediclaim benefits by hospitals.

“IRDA is working on a system to capturing data with regard to health insurance systems and entire medical process and billing claims,” a person familiar with the matter said. The system, the source said, will be aimed at improving health insurance services and also preventing over-billing by hospitals.

In the long run, sources said, this would also be useful in developing a code in line with the global practice, besides reducing the cost of health insurance and enhancing its reach.

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The health insurance sector is facing problems because of high cost to claim ratio. The cost ratio for the public sector companies was 140 percent of the premium received under the health portfolio as on June, 2012.

Insurance companies have a network of hospitals, known as PPN, which offers health insurance services under cashless facility. The network hospitals are decided through the agreement between the Third Party Administrators (TPAs) and the hospitals and the list is amended from time to time.

The four PSU insurance firms - National Insurance, New India Assurance, Oriental Insurance and United India Assurance - had in July last year stopped the cashless facility in select private hospitals, alleging over-billing.

The insurance companies had alleged that some of the hospitals were charging the patients having health insurance policies at rates which are quite higher than the reasonable cost of treatment.

As customers were left in a quandary post the suspension of cashless facility, the Insurance Regulatory and Development Authority (IRDA) in August came out with a circular stating that the policy holders undergoing treatment would continue to get cashless benefit even if the hospital where they are

admitted is delisted by insurers from cashless cover.

The regulator has also asked the companies to constantly update policy holders and customers on any change in the list of hospitals offering cashless cover.

PTI