Insurers have to specifically give reasons for any claim denial and refer to the corresponding policy condition.

In order to make the claims process for health insurance claims more customer-friendly and improve the functioning of Third Party Administrators (TPAs), the insurance regulator has suggested certain amendments.

Earlier, the Insurance Regulatory and Development Authority of India (Irdai) had asked health insurance companies to be more transparent in their health insurance claim settlement. Claims will have to be processed in a transparent, seamless, and efficient manner within the prescribed timelines. “All the insurers shall ensure putting in place systems to enable policyholders to track the status of cashless requests/claims filed with the insurer/TPA through the website/portal/app or any other authorized electronic means on an ongoing basis. The status shall cover from the time of receipt of a request to the time of disposal of the claim along with the decision thereon,” the regulator has now said.

The regulator has also asked the insurers to ensure that repudiation of the claim is not based on “presumptions and conjectures”. If a claim is denied or repudiated, the communication about the denial or the repudiation will have to be made only by the insurance company by specifically stating the reasons for the denial or repudiation, while necessarily referring to the corresponding policy conditions.

The insurer will also have to furnish the grievance redressal procedures available with the insurance company and with the insurance Ombudsman along with the detailed addresses of the respective offices. In case TPAs are settling the claims on behalf of the insurance company, policyholders will have to be notified about all the communications as well as location to track the claims.

Streamlining of TPA regulations
In its draft recommendations, Irdai has proposed to relax the requirement that at least one of the directors of the TPA should be an MBBS. As some state governments are allowing AYUSH practitioners to practice in allopathy, the regulator has proposed that the minimum qualification of MBBS for director of TPA will be substituted and linked with the term medical practitioner.

“Taking into consideration the experience gained while reviewing the dynamic needs of the insurance industry, the TPA Regulations 2016 were comprehensively reviewed in order to examine the scope for allowing operational freedom to both insurers and TPAs. The extant regulations are also reviewed from the perspective of allowing further facilitations that can be considered,” the regulator’s note says.

At present, every TPA has a chief medical officer with a minimum qualification of MBBS and holds a valid registration from the Medical Council of India or Medical Council of any state. The proposed changes will be substituted and linked with the medical practitioner as defined in the guidelines on standardization in health insurance. As of March 31, 2021, there are 23 TPAs registered with Irdai.

The regulator has proposed to do away with the current norms of mandating written bipartite/tripartite agreements between the insurance company and TPAs and instead the insurance company will be accountable to render effective cashless services to the policyholders.

“The insurers shall enter into a suitable health services agreement with the TPAs wherever the TPAs are engaged for providing health services to policyholders. The terms of providing health services by a TPA shall be mutually agreed by the contracting parties. Insurers shall be responsible for providing effective cashless services to the policyholders. The Authority may specify guidelines in the matter of health services agreements,” the exposure draft underlines.