Sucheta Dalal :Patients caught in crossfire between TPAs and doctors
Sucheta Dalal

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Patients caught in crossfire between TPAs and doctors   

February 16, 2010

 Policy-holders who have been admitted to Mumbai hospitals are trapped in the midst of a raging battle between city-based doctors and third-party administrators (TPAs), who facilitate medical insurance. This is due to doctors’ unhappiness with the low consultancy fees being allowed by a couple of TPAs for reimbursement under medical insurance plans.

Miffed over the outrageously low rates and unpaid dues from these TPAs, about 1,500 nursing homes and doctors under the banner of the Association of Medical Consultants (AMC), recently decided to boycott TPAs completely. This drastic measure meant that patients in hospitals covered by these TPAs could not avail of cashless facilities, putting them under severe difficulty.

KG Krishnamoorthy, chief operating officer, Future Generali India Insurance explains, “It appears that some of the TPAs have gone ahead and offered some rates to doctors. According to doctors, these rates are far lower than what they charge, which means that the TPAs have not reached an agreed rate. From the doctors’ side too, some of them keep on charging different rates depending upon the type of clients. This has been a practice in hospitals whenever a patient is admitted, whether he is insured or not and which type of room he takes. Sometimes the rates the hospitals charge are unreasonable. The TPAs are trying to control the claimed cost. There are complaints from hospitals also that there is a huge backlog in the money TPAs are supposed to pay up.”

Apparently, the Insurance Regulatory and Development Authority (IRDA) sought to soothe frayed nerves in a hurriedly-called meeting between the doctors and TPAs. The doctors have given the concerned TPAs a month to clear pending dues and rework tariffs altogether.

Doctors and TPAs have been at loggerheads for a long time now; the crisis has only now reached boiling point. Lalit Kapoor, legal advisor of AMC reveals, “Consultants are facing a major problem, with the money owed to them not being given on time. As per the agreement, they are supposed to pay up within 30 days. But they don’t. They take at least two-three months to clear their dues. Sometimes, no payments are received.”

Putting the onus of payment delays on insurance companies, a senior official from e-Meditek, one of the boycotted TPAs said, “After receiving the files for payments, we process the claim. After processing we upload the details to the insurance companies and then the claims are paid by the insurance companies. Most of the time, the payment from the insurance companies comes (in) late.”

He added, “We raise the bill on the insurance companies and from that the float is replenished to us, out of which we have to pay to the hospital. Usually it takes seven days from discharge. After receiving the file it doesn’t take more than seven days to settle the claim from our part. After that, most of the times, the insurance companies create the delays and then there is a lack of proper documentation which increases the delay.”

On the other hand, patients also face a lot of hassles in getting authorisation letters from the TPAs. Mr Kapoor alleged, “TPAs are supposed to give the authorisation within 24 hours. But this does not happen and patients are left fighting with the hospital officials.” He told Moneylife that the AMC has outlined fixed tariffs that they expect to be adhered to by the TPAs, failing which AMC could boycott its agreements with them.

The absence of regulation and government control in this area has only worsened the situation. KG Krishnamoorthy reveals, “There has been a request from insurance companies and TPAs to have some kind of standardisation on healthcare rates and even rating of hospitals. But no such rules have come in so far. We have requested the government and even tried to work with the regulator to put something in place. This is going on for the last six months but unless some intervention happens from the government (health ministry), the matter will go out of control. It is already outside the control of insurance companies.”

All this has even forced several insurance companies to do away with TPAs completely. “We have eliminated TPAs five years back to work efficiently and to lessen the turnaround time for the customers in cashless claims,” said Akshay Mehrotra, head of marketing, Bajaj Allianz.

It is now up to the IRDA to take a definite stand on the matter and put in place stringent regulations to check such unhealthy practices at hospitals and standardise tariff structures. Failure to do so will give sleepless nights to patients with cashless policies. — Moneylife Digital Team

-- Sucheta Dalal