A Study on the role of Third Party Administrators in Health Insurance in India

Transcription

1 A Sudy n he rle f Third Pary Adminisrars in Healh Insurance in India S.T. Krishnekumaar, Ph.D. Research Schlar, Sri Chandrasekharendra Saraswahi Viswa Maha Vidyalaya Universiy, Tamil Nadu, India. krishnekumaars@gmail.cm K.S. Meenakshisundaram, Direcr, CAA, Grea Lakes Insiue f Managemen, Chennai, India. drksmsundaram@gmail.cm Absrac Third Pary Adminisrars (TPAs) are he cmpanies licensed by Insurance Regulary and Develpmen Auhriy (IRDA) and hey are like a Business Prcess Ousurcing in Healh Insurance. An insigh in Rle defined by IRDA and he Rle Played by TPAs were he crux f he gap beween he Insurer and he TPA s. The TPA s were inrduced by IRDA infuse new managemen sysem and regulae healh care services and css. The sysem managed Healh Care was firs inrduced by Unied Saes in he year 1973 and he same was fllwed in India. The adven f TPAs Healh Services Regulain, 2001 was inrduced mainly implemen and regulae healh care services geher wih css as well as beer services he Insured. The Value Added Services prvided by he TPA is an add n fr he Insured public. The cmparisn f Life Insurance wih Healh care and he Sandalne Healh Insurance shws he exclusive healh cver impac. The services rendered by Hspial Mainenance Organisain f Unied Saes and TPAs depic he psiive aspecs f Hspial Mainenance Organisain can ac as a plafrm fr grwh f TPAs in India. There is als a cmparisn made beween he Hspial Mainenance Organisain and he Third Pary Adminisrars. Key Wrds: Third Pary Adminisrars, Hspial Mainenance Organisain, Chief Adminisraive Officer, Chief Execuive Officer, Insurance Regulary and Develpmen Auhriy.Rashriya Swashiya Bhima Yjana, Belw Pvery Line 1

2 1. Inrducin Wh can becme a TPA? Fifh Inernainal Cnference n Glbal Business, Ecnmics, Finance and - Prspecive TPA s shuld have a share capial f Rs. 1 crre - TPA as a Cmpany has be regisered under he Cmpanies Ac. - License frm auhriy funcin as TPA is issued by IRDA. - License fees have be paid by he TPA afer examinain f applicain and clearance by auhriy. - Day day adminisrain f TPA will be he respnsibiliy f Chief Adminisraive Officer (CAO) / CEO. - TPAs license are valid fr 3 years and is subjec renewal. - License graned TPA may be cancelled r revked by he auhriy wih prper Research Gap nice and afer ppruniy f being heard. Gap in rle defined by IRDA and Rle played by Third Pary Adminisrars: Failure mee he service respnsibiliy Lack f knwledge abu cverage Exclusin in plicies Sreamline simplifies claim prcess Aumaic develpmen f infrmain sysem Services f Qualified Medical prfessinals Delay in Selemen f Claims Indirec cs Cnsumer Cs f Healh Care increase Cs f managemen expenses increase 2. Objecives f he Paper 1. T knw he impac f Life Insurance in buil Healh Insurance and Sandalne Healh Insurance. 2. T ascerain he relainship f TPA selemen under varius caegry f insurance viz., Public Secr, Privae Secr, Grup Insurance, RSBY, Individual Insurance and Self Insurance. 3. T ascerain he u f pcke expenses in erms f cs f insurance 3. Lieraure Review The Third Pary Adminisrars were licensed by Insurance Regulary and Develpmen Auhriy regulae he healh care css and imprvemen in services in hspials benefi 2

3 he sciey as a whle. The sysem managed by Unied Saes in he year 1973 was fllwed by India in he adven f he Third Pary Adminisrars Healh Services Regulain, The said nrms f Healh Insurer suggesed by Insurance Regular were hrwn ligh by w f he Researchers Mr Surinder Kumar Bawa and Ms Ruchia Verma in An insigh in Rle defined and Rle played wih reference IRDA. 3.1 Nrms f Third Pary Adminisrars Prducin f License Insured / Plicy Hlder / Prspec. Services ffered by TPA f an Insurer be explici. Disclsure f Ideniy public / Insured / Plicy hlder regarding he TPA agreemen wih Insurer. Infrm Insurer f any maerial fac r adverse impac r relaing incnsisencies f Insurance cmpany s business. Obain requisie dcumens fr examinain f claims arising u f Insurance cnracs. Avid frm any manner which may influence direcly r indirecly Insured fr swich ver anher Insurer. Mainain cnfidenialiy f Daa Cllecin. Render necessary assisance plicy hlders/ claimans /beneficiaries in selemen f claim. Deach hem frm rading n infrmain and recrd f is business. Refrain frm demanding share f prceeds frm Insured r mi any maerial infrmain. 3.2 Naure f Aciviy f Third Pary Adminisrars TPA ensures Cashless hspialisain, Hassle free services, Efficien and Cs effecive medical services and Reimbursemen in ime. TPA wuld develp apprpriae sysems and managemen srucures, cnrlling css, prcl minimise reamen / invesigains, imprve qualiy f services ulimaely leading lwer premium fr he Insured. The rle f TPA is briefed under: All medical recrds f an Insurer are ransferred TPA. TPA issue Ideniy cards all plicy hlders Plicy hlder infrm TPA f claim in Tll free help line. TPA direcs he paien n receip f claim inimain a Tied up r any her hspial. TPA issues auhrisain leer hspial and will pay fr he reamen. TPA s rack he case f insured a hspial and a he pin f discharge and bills are sen TPA. TPA makes paymen he hspial 3

4 Fifh Inernainal Cnference n Glbal Business, Ecnmics, Finance and TPA sends all dcumens Insurer alng wih bills Insurer reimburses he TPA TPA will be a paid a cmmissin as remunerain fr services rendered. 3.3 Add On Services f a Third Pary Adminisrar There are cerain Add n Services prvided by he Third pary Adminisrars and he same is highlighed belw: i. Arrangemen f Ambulance Services ii. Medicines and Supplies iii. Guide Member fr specialised cnsulains iv. Prvide infrmain abu healh faciliy, hspials, bed availabiliy v. 24 hurs helpline vi. Organisain f Life syle vii. N exra burden Insured viii. Prviding effecive and efficien services a n exra cs. The Services f Life Insurance and he sandalne Healh Insurance plicy was made as here are mre Life Insurers in lk u wih heir prducs n Healh Insurance Shield which creaes much mre cmpeiin he General Insurance handling Healh as well as Sandalne healh. The Life Insurers engaged in disribuin f Healh Insurance plicy have expensive premium han her General Insurers and he same was published in Times f India, Chennai Ediin daed Furher a cmparisn has been made beween he Life Insurer and Sandalne Healh Insurer. Cmparisn f Life Insurance and Healh Insurance S N Life Insurance Healh Insurance 1 Lng Term plicy Shr Term plicy N required infrm any change in plicy unless here is a change in risk cvered Premium is fixed ver he enire cnrac perid Lumpsum paymen is prvided wheher hspial expenses is incurred r n Deerminain Apprach which is based n Mrbidiy able. Prin f premium deducible under Secin 80C f Incme Tax Ac T infrm changes during plicy r renewal. Premium vary a each renewal Pay claim accrdingly slabs f hspial expenses f plicy hlder Schasic Apprach which mre cmplicaed han Life and Mrbidiy able. Enire premium deducible under Secin 80D f Incme Tax Ac. 4

5 Mr Surinder Kumar Bhawa and Ms Ruchia Verma als had made sme inrads in he HMO rle in Unied Saes which made his Research Schlar cmpare he rle f HMO in Unied Saes and he rle f IRDA in India. The rigin f Healh Insurance in Unied Saes was a highligh frm The Clumbia Encyclpedia 6 h ediin which was praciced by he Unied Saes and he same was fllwed in India. 3.4 Healh Insurance in Unied Saes The Healh Insurance in Unied Saes emanaed as a vlunary prgramme which daes frm he year The pracice f Gvernmen Healh Insurance cmmenced in early 1900s. Thedre Rsevel made he majr planks f Prgressive Pary in he year In he year 1920, he Gvernmen spnsred plans led by American Medical Assciain was mivaed by he Gvernmen paricipain resuling in Scialized medicine. There were mre Praciiner Physicians enrlmen was in Blue Crss and Blue Shield Plans. The Cmmuniies se nn-prfi service. In he year 1965, Presiden Lyndn B Jhnsn came u wih Federal Legislain in he naure f Medic aid &Medicare. The Medicare is fr he aged and he Medic Aid is fr he indigen r he needy. In he year 1993, Presiden Clinn prpsed a healh insurance and in he year 1999 develped a Paiens Righs Bill prec denial f Service peple and her HMO limiains. Cmparisn beween Hspial Mainenance Organisain (Unied Saes) and Third Pary Adminisrars (In India) S N HMO TPA 1 Underwriing n is wn bks is permied TPAs are n allwed underwrie 2 HMO is an Independen rganisain TPA is dependen n Insurer 3 Hspials can ffer HMO services 4 HMO can have Chain f Hspials 5 HMO can adverise Admissin f a member f HMO in a hspial and reduce cs is 6 permied. 7 HMO cann chse her han he Chain f Hspials TPA services cann be ffered by Hspial. TPAs cann ener in any her business aciviies. TPAs cann adverise wihu prir permissin f Insurers. TPA's des n have such auhriy. Plicy Hlder can chse her han he newrk hspial f TPA and selecin f privilege is ha f Insured. Crpraes wh were using he services f Third Pary Adminisrar agencies were faciliars fr claim prcess and reimbursemen easier and smher fr heir emplyees. This was regulaed by inrducin f TPA s by IRDA. 5

6 Accrding Ramesh R Bha he findings revealed ha here exis Agreemen beween he Hspial and Third Pary Adminisrar regarding he cs f reamen. Furher he TPA s d n visi a he ime f admissin and heir enquiry will be n perid f say in hspial, rm ren and bed charges and relaed financial issues and n n service relaed issues. Furher he TPA s have minimal cnrl ver he hspial adminisrars and vice versa. 4. Research Mehdlgy The sudy was chsen knw he relainship in he rle f Third Pary Adminisrars in Claim Selemen hrugh he Public Secr Insurance, Privae Secr Insurance, Nainal Healh Scheme, Grup Insurance, Individual Healh Insurance and Self Insurance. An esimain f an Unknwn variable frm a Knwn variable was dne hrugh a Regressin Analysis. The Dependen variable being he Emplymen f Spuse and he Independen Variables are he Slvency Margin, Increase in cs f insurance, N cvered beynd 60 years, Selemen f TPA, Tax Cncessin and Discun in premium. The research was dne wih 93 samples aached privae secr and IT enabled services. The sudy was made in Chennai, Klkaa and Guwahai..The research mehdlgy depics he flw f he research prcess and serves as guidance fr he research carry u he research sudy. I cmprises f daa surce, sample size, sampling echniques and ls f analysis. Research Design Research Sraegy Descripive research Sudy Ppulain Ppulain Surce Sudy Area Sample Frame Sampling Uni Sampling Mehd Sample Size Naure f Daa Surces f Primary Daa Surces f Secndary Daa Tl used fr Daa cllecin Type f Quesins Emplyees wrking in Privae secr & IT enabled services Saisics issued by IRDA Varius ciies in India viz Chennai, Klkaa & Guwahai Emplyees wrking in Mer and ier II and ier III ciies and in he age beween 21 and 60 a varius levels f Managemen. Salaried class wrking in Privae secr & IT enabled services Cnvenien sampling 93 samples Bh Primary and Secndary Survey mehd hrugh Quesinnaire Newspapers, Jurnals, Magazines, Previus Research Reprs & Websies Pre esed and Srucured Quesinnaire Clse ended, Muliple chice 6

7 Esablishing Validiy Tes f Reliabiliy Saisical Tls Used Carried u check Validiy f cnsruced Quesinnaire 0.62 (62%) Alpha 1. Simple percenage mehd 2. Regressin Analysis 3..Percenage analysis 4.1 Daa Analysis and Inerpreain Primary daa was clleced hrugh quesinnaire cmprising f varius parameers frm he respndens. The infrmain generaed hrugh he survey is being repred hrugh he abulain f caegrical variables and he resuls are discussed belw. Regressin Analysis: Dependen variable is Emplymen f Spuse Table 1: Emplymen f Spuse wih Public Insurance and rle f TPA in Claim Selemen Unsandardized Sandardized Mdel B Sd. Errr Bea 1 (Cnsan) Slvency Margin Increase in Cs f Ins N cvered Beynd 60 years Selemen f TPA Tax Cncessin Discun in Premium a. Dependen Variable: Emplymen f Spuse Hyphesis H0 : Rle f TPA has n significance in Claim Selemen n Public Insurance. H1 : Rle f TPA in Claim Selemen is significan in Public Insurance. The rle f TPA in public Insurance highly significan as here is mre invlvemen f TPA in receiving he claims, prcessing and frwarding he Insurer fr paymen. I des he medical relaed and Para-medical scruiny f he bills using heir experise. This ignres he relainship beween he Insurer and Insured fr he lng years. Table 2: Emplymen f Spuse wih Privae Insurance and rle f TPA in Claim Selemen Unsandardized Sandardized Mdel B Sd. Errr Bea 7

8 1 (Cnsan) Slvency Margin Increase in Cs f Ins N cvered Beynd 60 years Selemen f TPA Tax Cncessin Discun in Premium a. Dependen Variable: Emplymen f Spuse Hyphesis H0 : Rle f TPA has n significance in Claim Selemen n Privae Insurance. H1 : Rle f TPA in Claim Selemen is significan in Privae Insurance. In privae Insurance als he invlvemen f TPA s in selemen f claims is significan as here are mre rejecins in claims which are encuraged by Insurers in rder mainain heir slvency margin. Table 3: Emplymen f Spuse wih NHS by RSBY and rle f TPA in Claim Selemen Unsandardized Sandardized Mdel B Sd. Errr Bea 1 (Cnsan) Slvency Margin Increase in Cs f Ins N cvered Beynd 60 years Selemen f TPA Tax Cncessin Discun in Premium

9 Unsandardized Sandardized Mdel B Sd. Errr Bea 1 (Cnsan) Slvency Margin Increase in Cs f Ins N cvered Beynd 60 years Selemen f TPA Tax Cncessin Discun in Premium Dependen Variable: Emplymen f Spuse Hyphesis : H0 : Rle f TPA has n significance in Claim Selemen n Nainal Heah Scheme. H1 : Rle f TPA in Claim Selemen is significan in Nainal Healh Scheme. The RSBY being a Nainal Healh Scheme is n significan as he reach f he scheme has n aained cverage he large secin f he sciey. Hence he invlvemen f TPAs may n be significan as he cverage is als fr he BPL families wih very small Sum Insured per family. Table 4: Emplymen f Spuse wih Grup Insurance n Emplyee and rle f TPA in Claim Selemen Unsandardized Sandardized Mdel B Sd. Errr Bea 1 (Cnsan) Slvency Margin Increase in Cs f Ins N cvered Beynd 60 years Selemen f TPA

10 Tax Cncessin Discun in Premium a. Dependen Variable: Emplymen f Spuse Hyphesis : H0 : Rle f TPA has n significance in Claim Selemen n Grup Insurance. H1 : Rle f TPA in Claim Selemen is significan in Grup Insurance. In case f Grup Insurance he Selemen f Claims by TPA is n significan a all he Grup will cnsis f Crpraes and Large Business Huses wh are dminan and dicaes he claims. Furhermre, cnsidering he business relainship and huge premiums which are maerial fr he Insurers wheher privae r public mainain heir business in erms f premium cllecin. Table 5: Emplymen f Spuse wih Individual Healh ffered hrugh ie up and rle f TPA in Claim Selemen Unsandardized Sandardized Mdel B Sd. Errr Bea 1 (Cnsan) Slvency Margin Increase in Cs f Ins N cvered Beynd 60 years Selemen f TPA Tax Cncessin Discun in Premium a. Dependen Variable: Emplymen f Spuse Hyphesis : H0 : Rle f TPA has n significance in Claim Selemen n Individual Healh Insurance. H1 : Rle f TPA in Claim Selemen is significan in Individual Healh Insurance. The Individuals wh lack in bargaining pwers are unaware f he insurance marke. These resuls in dminain f he selemens by TPA and cnsidering he premium size, he selemen f claims is shwing as a medicre. Hence he Selemen f Claims by TPA is n s significan. Table 6: Emplymen f Spuse wih Self Insurance and rle f TPA in 10

11 Claim Selemen Unsandardized Sandardized Mdel B Sd. Errr Bea 1 (Cnsan) Slvency Margin Increase in Cs f Ins N cvered Beynd 60 years Selemen f TPA Tax Cncessin Discun in Premium a. Dependen Variable: Emplymen f Spuse Hyphesis H0 : Rle f TPA has n significance in Claim Selemen n Self Insurance. H1 : Rle f TPA in Claim Selemen is significan in Self Insurance. The Selemen f Claims by TPA is n significan in case f Self Insurance as here is nly parial cverage and he balance is brne by he Insured himself. Furher he c-paymen in case f Senir Ciizens and Dependans wih higher age in Grup Insurance als cnribues higher cpaymen. 5. Cnclusins 1. The TPA s have mainain he daa assis he Insurers fr heir claim selemen and u f pcke expenses. 2. Cpaymen decisin has really depend n he claims experience and n by age band alne. 3. Individual Insurance and Self Insurance hrugh Parial Insurance shuld n be deprived f he bargaining pwer. 4. Grup Insurance hrugh which Exclusins in her plicies, Cverage frm Incepin f all diseases and wihu any age band a he cs f Individual Insurance shuld n be encuraged. 5. TPAs shall be jus and equiable he paiens and insured wihin he nrms f he Insurer. 11

12 6. Suggesins 1. Third Pary Adminisrars shuld n decide he claim as he cusmer relainship beween he Insurer and Insured is ally absen. 2. Ou f pcke expenses inermediaries and TPA s and hspialisain faciliies will reduce cs escalain. 3. TPAs in India shuld ake he rle f HMO in Unied Saes as his will imprve he qualiy f insurance and he service parameers. 4. Privae Secr imprve heir business vlumes in healh insurance s ha here is abslue cmpeiin amng he privae secr insurance and public secr insurance. 5. Healh Care by LIC f India wih mre fcus n mrbidiy and wider cver in healh will creae mre cmpeiin amng public secr cmpanies iself. 6. There shuld be adequae infrasrucure in hspials which has be mnired by TPAs. References hp:// - Third Pary Adminisrars (TPAs): An Insigh in Rle Defined and Rle Played wih Reference IRDA. Times f India, Chennai Ediin d. 17 h June 2015 n Life Plus healh Insurance gains racin hp:// hp:// hp:// hp:// hp:// hp://blgs.rediff.cm/healh-and-insurance/2010/02/11/wha-d-yu-mean-by-pa-ininsurance/. hp://irda.gv.in hp:// 12