For delay in health claims payment as well as delay in submission of documents, heavy penalties will be imposed upon insurance companies and agencies dealing with claims handling
Pradhan Mantri Rashtriya Swasthya Suraksha Mission (PMRSSM), popularly known as ‘Modicare’, has led to both insurance companies and third party administrators rushing to ramp up their teams ahead of the launch on October 2.
Three sources told Moneycontrol that the insurance stakeholders, both TPAs and general/health insurers, will be increasing their workforce by up to 15 percent in the near term to manage the scheme-related processes.
The general insurance sector, including the TPAs, employs 9 lakh people.
The scheme, which will provide Rs 5 lakh health insurance to 107.4 million poor rural families and identified occupational category of urban workers, is the largest ever state-sponsored healthcare programme.
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The model tender documents have said that third party administrators (TPAs) that assist insurance companies in processing health claims will be appointed as Implementation Support Agency (ISA) under this scheme.
“The penalties proposed for ISAs for any delay in claims is very high. So, we are looking to build the team and also hire fraud experts so that no inordinate delays occur,” said the chief executive of a health insurance TPA that handles both public sector and private sector companies.
The model tender document has also said that TPAs registered with Insurance Regulatory and Development Authority of India (IRDAI) for three years and with an average annual turnover of Rs 25 crore will be eligible to bid for the process.
Confusion
However, once appointed the ISA has to ensure that the claims are paid within 15 days of the intimation of the claim. There is also some confusion on the claims aspect, as IRDAI regulations state that a TPA can only facilitate the claim but not be directly involved in claim settlement.
Existing claims teams in insurance company already deal with claims for motor, health as well as crop. “Considering that the endeavour of the government is timely settlement of claims, the teams will be spruced up since penalties will adversely impact the balance sheet,” said the head of claims of a large public sector general insurer.
When it comes to the on-ground implementation, the ISA has a larger role to play than the insurance company. From handholding the insured to training the Ayushman Mitras who will be nodal officers for the scheme.
For instance, if pre-authorisation to hospital is delayed beyond defined period, the ISA will have to pay Rs 500 per delay. For delay in claims disbursal too, the penal interest will be borne by the ISA.
The ISA will also be responsible for conducting medical audits. If that is not submitted, there is a fine of Rs 10,000 for each audit report not submitted.