The general insurance council (GI Council) has come up with an indicative rate chart for treatment of covid-19 patients which will guide insurance companies during the claim settlement process. The rates will be reviewed every month to ensure they represent the charges prevalent in the country.
The insurance companies will be guided by these referral rates while processing hospitalisation treatment claims related to covid. For cases, where the charges may be more than the referral rates that have been indicated, due to various medical exigencies, insurance companies will take them into consideration while processing claims.
Insurance experts said, it may be difficult to set a tariff or fixed rates for covid treatment hence an indicative rate chart has been proposed. Without this, in the event of uncontrolled charges being levied by hospitals, the medical cost payable as insurance claims would go up which will ultimately result in premiums going up for insuring public and medical insurance may become unaffordable.
“Covid-19 is a new illness with no established protocols and standardised treatment costs. This may at times result in an insurance company raising questions on the amounts spent on the Covid-19 treatment. This creates a huge uncertainty in the minds of unsuspecting covid-19 patients,” the GI Council said.
In the absence of any standardized rates for covid 19 treatment, it has been seen that the hospitals, in some cases, were charging a lot for covid 19 treatment resulting in insurance companies questioning the claims. For the insureds it often meant using up their entire sum insured at one go.
“The GI Council has taken an overall view across the country and has standardized the Covid-19 treatment costs in consultation with insurers. It will benefit both the costumers and the insurers because now there is some sort of standardization. Insurers have a negotiated agreement with hospitals and these rates will act as an upper limit to the negotiated rates with the hospitals for insurers”, said Bhaskar Nerurkar, Head - Health Claims, Bajaj Allianz General Insurance.
“Initially, the claim amount was a bit higher and now we are seeing the claim amount stabilizing. As the claim size for Covid-19 increases, the average claim amount stabilizes. The average claim amount may not come down any further but it will definitely standardize the claims and it will act as a deterrent to hospitals which have been charging exorbitantly for covid treatment”, he added.
The average claims due to covid are in the range of Rs 1.2- 1.5 lakh. But in metro centers, it might be higher. So far, insurers have received covid claims to the tune of more than Rs 300 crore.
“This will not dramatically reduce the average claim amount but will certainly reduce friction and give clarity to everybody in the system including the customers. It will also quicken the process of claim settlement process”, said Amit Chhabra, Business Head – Health, Policybazaar.com.
“The rates published by GI Council, if applied properly, policyholders will be benefit the most out of it. This might create a milestone in standardizing treatment cost for years to come,” said Dr S Prakash, MD, Star Health and Allied Insurance.
The council has proposed to create a consensus on billing pattern for covid patients on a per day basis based on criterion such as type of stay and treatment, city or district hospital, and type of hospital. Accordingly, the hospitals have been segregated as National Accreditation Board for Hospitals & Healthcare (NABH) accredited hospitals and non-NABH hospitals.
As far as NABH accredited hospitals are concerned, they can charge upto Rs 10,000, that includes the PPE cost, for isolation beds that includes supportive care and oxygen in case of moderate sickness. In case of ICU beds without ventilator, the accredited hospitals can charge upto Rs 15,000 (includes PPE cost) and for ICU with ventilator, the accredited hospitals can charge upto Rs 18,000 (includes PPE cost).
Non-accredited hospitals for isolation beds can charge upto Rs 8,000, Rs 13,000 for ICU without ventilator beds and Rs 15,000 for ICU with ventilator beds. The proposed hospital costs per day will include consultation, nursing charges, covid testing, PPE, drugs and other consumables. However, it excludes treatment of any co-morbid conditions, for which an additional amount of up to Rs 5000 would be allowed to be charged.
Metropolitan hospitals can charge upto 100 per cent of the ceiling rates per day while state hospitals can go upto 90 per cent of the ceiling rates and hospitals in the rest of the country can go upto 75 per cent of the proposed rates. Also depending on the type of the hospital and the number of beds, the GI council has proposed rates for hospitals treating covid. It has also proposed the rates that the hospitals can charge for investigations as a part of the per day cost.
“The GI Council's proposed covid treatment rates should be adopted by insurance companies so that patients get some relief from the financial burden of covid treatments. Insurance companies should also reduce the waiting period and extend the ceiling for patients suffering from comorbidities, which are responsible for medical complications and high medical bills,” said Abhishek Kapoor, Executive Director, Regency Healthcare.
“The standard rates proposed by GI Council will bring transparency and clarity in the settlement of Covid-19-related insurance claims. The inclusion of PPE and covid testing charges will also help in faster settlement of claims during these trying times. Considering the cost of medical treatment is expensive in metro cities, the proposed rates for hospitals will be lower in smaller towns and cities. The move would help people in managing their finances in a better way,” said Abhijit Chatterjee, EVP and Head-Claims, IFFCO Tokio General Insurance.
Differing with insurers, Kousar A Shah, Group COO, Aakash Healthcare & Super Speciality Hospitals, Dwarka said, "Mandating one particular price for all type of hospitals, irrespective of its size, facilities, clinical specialists, infrastructure, etc, somewhere to me looks to be a decision taken in a hurry. A nursing home which has its ACPB (average cost per bed) cut short due to its practices (asking patients to buy own meals, own medicine, no AC etc) cannot be compared to a tertiary care, five star hospital, which, owing to the facilities it’s giving, has huge ACPB in comparison."
"This difference could have been minimised by creating different type of price capping in a laddering form, basis the facilities and type of care a hospital is providing, and could have been a much better proposition for the entire private healthcare," Shah said.