By IANS,
Chennai: Four state-owned non-life insurers – National Insurance Company, New India Assurance Company, Oriental Insurance Company and United India Insurance Company – are moving towards floating a common health insurance claims settlement agency or third party administrator (TPA).
“The boards of United India and New India have approved in principle the formation of a common TPA. The boards of other two companies have to give the green signal. After that the structure of the new company and manning it will have to be decided,” G.Srinivasan, United India chairman and managing director, told reporters here Monday.
The four insurers are not happy with the manner in which claims are being processed and settled by the existing TPAs.
Insurers complain about diversion of float funds provided to TPAs to other group ventures rather than for using it for settling claims.
Further, the bulk of the business for the TPAs are provided by the government insurers with standalone health insurers and some non-life insurers deciding to settle claims in-house.
With health insurance claims mounting, the four government owned non-life insurers are focussing on ways to minimise the claims outgo.
United India’s health insurance claims ratio for last fiscal stands at around 131 percent.
The earlier expectations of TPAs trying to bring down the treatment costs by hard negotiations with the hospitals have not materialised.
“United India is trying to negotiate better rates with the hospitals. We are also tightening the supervision of the TPAs,” Srinivasan said.
Before the advent of TPAs, the big four non-life insurers were processing the claims in-house.
“Earlier there was no cashless claims settlement – payment directly to the hospitals- it was always the policyholders getting reimbursement. The advent of cashless necessitates different set of IT infrastructure and people,” said Srinivasan.
He said consulting firm KPMG had given a report on the feasibility of setting up a common TPAs by the four companies a year ago.