CUTTING COSTS PSU health insurers form third-party administrator

Mumbai: Healthcare service providers are in for some heavy collective bargaining from public sector insurance companies, which pay hospital bills worth close to Rs 4,000 crore every year. The General Insurers' (Public Sector) Association has set up a captive third-party administrator — Health Insurance TPA of India — which will centralize all negotiations with hospitals.      Speaking to TOI, G Srinivasan, chairman, New India Assurance, said that the company has been formed with shareholding from New India, National Insurance, Oriental Insurance, United India Insurance and the General Insurance Corporation. "The priority is to have a strong IT system in place. Once that is done, the company will gradually take over handling of claims from other TPAs," said Srinivasan. He added that the process would start only next year.      A captive TPA will enable  health insurers to meet with directions from the regulator and also the courts, which require them to take in-house decisions in respect of health insurance claims. In the private sector, some of the large companies such as ICICI Lombard and Bajaj Allianz have been managing their health insurance claims inhouse without the use of TPAs.      In the last two years, public sector insurers have made significant headway in bringing down cost of procedures in hospitals. However, despite this, there have been leakages. For instance, hospitals that have agreed for package rates for procedures are working around the tariff by using a loophole where they are allowed to charge more in case of complications arising out of the patient having multiple health issues.      The other issue is group health insurance where the client still calls the shots. Insurers say that wherever the corporate decides on the appointment of the TPA, the TPA does his best to keep employees happy. "Perhaps technology will hold the key in blocking leakages," said Segar Sampath Kumar, general manager and head of health insurance at New India Assurance.