Final Draft Report
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RSBY COMMITTEE
FINAL DRAFT
REPORT
Final Draft Report
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Contents 1. EXECUTIVE SUMMARY .................................................................................................................................. 4
a. SUMMARY OF RECOMMENDATIONS MADE IN THE REPORT ......................................................... 12
2. INTRODUCTION .............................................................................................................................................. 13
a. BACKROUND AND PAST EXPERIENCE ................................................................................................. 15
b. STRENGTHS OF RSBY................................................................................................................................ 15
c. OBSERVED WEAKNESSES OF RSBY ...................................................................................................... 15
4. IMPLEMENTATION ISSUES........................................................................................................................... 18
5. ISSUE NO 1: MAKING RSBY MORE PATIENT FRIENDLY ....................................................................... 18
a. TREATMENT OUTCOMES REPORTED ................................................................................................... 18
b. VARYING QUALITY OF HEALTH SERVICES IN PRIVATE/ PUBLIC SECTORS ............................... 18
c. ENROLMENT PROBLEMS ......................................................................................................................... 19
d. RECOMMENDATIONS ON IMPROVING PATIENT SERVICES ............................................................ 21
e. SUGGESTED SCOPE OF OUT PATIENT SERVICES ............................................................................... 24
6. ISSUE NO 2: DEALING WITH HOSPITAL GRIEVANCES .......................................................................... 28
a. COMMONLY REPORTED ABUSE BY HOSPITALS ................................................................................ 28
b. RECOMMENDATIONS ON HOSPITAL GRIEVANCES........................................................................... 29
7. ISSUE NO 3: RUNNING INFORMATION TECHNOLOGY APPLICATION ............................................... 32
a. NO UNIFORMITY ARCHITECTURE IN RSBY CURRENTLY: ............................................................... 32
b. USES OF IT ARCHITECTURE .................................................................................................................... 33
CLINICAL DATA ON EPIDEMIOLOGY AND TREATMENT PROTOCOLS ............................................. 33
MONITORING ON DEVIATIONS ................................................................................................................... 34
c. RECOMMENDATIONS ON IT APPLICATION ......................................................................................... 34
8. POLICY LEVEL ISSUES .................................................................................................................................. 36
9. ISSUE NO 4: INTERFACE WITH INSURERS ................................................................................................ 36
a. INSURANCE COMPANIES ARE NOT DESGINED FOR THE JOB OF OUTREACH ............................ 36
b. CONFLICT OF INTEREST OVER PUBLICITY AND ENROLMENT ...................................................... 37
c. LIMITED AVENUES FOR FEEDBACK TO GOVT EXIST ....................................................................... 37
d. INSURANCE COMPANY HAS NO INTEREST IN EQUITABLE DISTRIBUTION OF SERVICES ...... 37
e. DIFFERENCE IN PERSPECTIVE OVER IT APPLICATION .................................................................... 37
f. LOW LEGITIMACY FOR MEDICAL AUDIT ............................................................................................ 38
g. INSURERS CANNOT BE EXPECTED TO REGULATE THEMSELVES ................................................. 38
h. CORE COMPETENCE OF INSURANCE COMPANIES ............................................................................ 38
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i. WHY STATE NODAL AGENCIES FIND IT DIFFICULT TO PERFORM THE FUNCTIONS OF
INSURER ................................................................................................................................................................ 39
j. CORE COMPETENCE OF STATE NODAL AGENCY .............................................................................. 40
k. THE ADVANTAGES AND DISADVANTAGES OF INSURED AND SELF INSURED MODELS ........ 42
l. RECOMMENDATIONS ON ROLES OF SERVICE PROVIDERS ............................................................. 42
10. ISSUE NO 5: INCENTIVE STRUCTURES FOR STAKEHOLDERS ......................................................... 48
a. INCENTIVE STRUCTURE FOR HOSPITALS ........................................................................................... 48
b. GRADING SYSTEM RECOMMENDED ..................................................................................................... 49
c. NORMS FOR SINGLE SPECIALTY HOSPITALS ..................................................................................... 50
d. ISSUES WITH NABH NORMS .................................................................................................................... 50
e. RECOMMENDATIONS ON HOSPITAL INCENTIVES ............................................................................ 51
f. INCENTIVE STRUCUTRES FOR INSURERS ........................................................................................... 54
ADJUSTMENT / REFUND ............................................................................................................................... 54
ANNUAL FINANCIAL REVIEW ..................................................................................................................... 54
g. RECOMMENDATIONS ON INCENTIVES FOR INSURERS ............................................................... 56
h. INCENTIVE STRUCTURES FOR TPAs ...................................................................................................... 57
i. RECOMMENDATIONS ON INCENTIVE STRUCTURES FOR TPA ................................................... 57
11. CONCLUSION .............................................................................................................................................. 59
a. INSURANCE MODEL SEEMS BEST AT THE MOMENT ........................................................................ 59
b. TO PUT PATIENTS FIRST, ALL MEDICAL CONTENT SHOULD BE PART OF TENDER
DOCUMENT AND AGREEMENT WITH INSURER .......................................................................................... 59
c. CONTRACT WITH INSURER IS A LEGAL CONTRACT ........................................................................ 60
d. CREATE AVENUES FOR FEEDBACK ...................................................................................................... 60
e. AUTHORISE THE SNA TO ENFORCE THE NORMS ............................................................................... 60
f. SANCTIONS AND INCENTIVES ................................................................................................................ 61
g. COSTS OF NORMLESSNESS ARE FARILY HIGH .................................................................................. 61
h. PENALTIES CANNOT BE PRIMARILY MONETARY ............................................................................. 62
i. THE CHOICES BEFORE US ........................................................................................................................ 62
LIST OF ANNEXURES ............................................................................................................................................. 63
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1. EXECUTIVE SUMMARY
The Rashtriya Swasthya Bima Yojana (RSBY) is being implemented in 24 states in India today,
with a total of 3.75 crore card holders, providing coverage to a total of 11.25 crore beneficiaries
at an average premium of approximately Rs. 400. A total of 25 lakh beneficiaries have availed
hospitalization services at an average claim payout of approximately Rs. 5000. The above data is
for 2013-14 as generated on 1st September 2014.
RSBY tries to use the structure of private health insurance to provide cashless medical services
to the below poverty line population of the country. The basic issue that creates challenges for
RSBY is the low involvement of the State Nodal Agency (SNA) and that there are hardly any
built in checks to create accountability for either Insurers or hospitals participating in the
scheme. Private health insurance schemes function on the basis that enlightened self-interest of
the patient is sufficient to guard his interests. The consumers of private health insurance are well
aware of the benefits available to them since they have paid for these but the below poverty line
population is not so aware. Even in case of private health insurance schemes, enlightened self-
interest is not sufficient protection since patients are scared and vulnerable and have little access
to systematic information. In the case of below poverty line patients, enlightened self-interest
barely works. The absence of checks and accountability in RSBY leaves the patient at the mercy
of Insurers and hospitals.
The states of Maharashtra and Tamil Nadu left the scheme after initially agreeing to implement
it. Andhra Pradesh had agreed to implement RSBY in the state as a top-up scheme but later
withdrew from the scheme. Other states have been implementing the scheme but they have many
reservations about the scheme. This committee was set up to take feedback from the states and
incorporate their learning experiences in the scheme so that it could be implemented fully
throughout the country.
RSBY has been faced with multiple weaknesses from the operational front, which has led to low
accessibility of the scheme by the beneficiaries. Some of the key weaknesses observed are:
1. There is a conflict of interest with the Insurance Company conducting enrolments,
empanelment/de-empanelment of hospitals as well as the insurance claims settlements, in
some cases through the Third Party Administrators (TPA).
2. The different software at the field level e.g. Transaction Management Software (TMS),
was flawed, leading to no data or inaccurate data being reported.
3. There were no Key Performance Indicators defined for monitoring the scheme
4. Lack of checks and balances at the operational level have led to multiple frauds in the
scheme,
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5. The TPA’s have been operating the scheme at various States, whereas the contract was
signed with the Insurance Company. This has led to instances where the States had to
coordinate with the TPA, who has no stake in RSBY.
6. Inadequate staffing of the SNA is one of the key issues observed in RSBY. This has led
to no or low level of involvement of the SNA at the States.
In the hope of helping poor patients and as a result of unintended consequences, RSBY has
ended up being a hospital centric scheme and an Insurer-centric scheme.
Ministry of Labour and Employment (MoLE) has taken various initiatives to plug these
weaknesses in RSBY. A brief of the initiatives undertaken by MoLE are as below:
a. Standardized data preparation and pre-enrolment guidelines and template shared with the
states to ensure exhaustiveness of pre-enrolment data being collected at the field level.
The enrolment software at field level is also being modified to bring into effect the
requisite changes in the data.
b. Separation of enrolment activities from the insurance companies, through a centralized
enrolment agency, to avoid conflict of interest.
c. Introduction of wellness checks for one member of the beneficiary family
d. Strengthening of role and involvement of SNA along with adequate staffing at various
levels.
e. Role of SNA has been enhanced in the empanelment and de-empanelment of hospitals.
f. Strengthening of MoLE with adequate capacity at various levels.
g. Introduction of key performance indicators (KPI’s) and periodic MIS to monitor the
performance of the insurance companies.
h. Setup of technical help desk at MoLE to address field level technical issues in software
i. Introduction of penalties (including refund of premium on pure claim ratio) on insurance
companies, SNA on non-performance and non-adherence to protocols.
j. Standardization of the Transaction Management Software (TMS) across the country with
one version.
k. The Contact Center is being introduced to have a structured mechanism to address the
grievances and obtain feedback from the beneficiary.
l. Integration of SMS gateway has been completed and SMS services shall be initiated
soon.
m. Setting up of district level kiosks through a separate agency to provide effective post
enrolment services.
n. Increased focus on training of SNA and other beneficiary on each aspect of the processes
within RSBY.
o. Introduction of field and medical audits for which the empanelment process is being
conducted by MoLE.
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p. A Committee has been setup at MoLE to look into clinical pathways for all tertiary care
procedures.
q. Norms on hospital spread and number at district and block have been included in the
KPI’s for insurers.
r. Detailed functional requirement specifications for revamped RSBY
The Committee constituted by Ministry of Labour and Employment (MoLE) was entrusted to
bring out the best practices across states and make recommendations for the revamping of
RSBY, with a view to improve service delivery, ensure greater efficiency and transparency and
to provide RSBY as a platform to other states for other schemes too. In its recommendations, the
Committee has observed and recommended areas for enhancement of RSBY and a way forward.
Brief of the Committee’s recommendations
a. RSBY has over the years relied on the insurance companies to conduct enrolments,
empanel hospitals as well as provide insurance to its beneficiaries. It is true that the
Insurance companies do have considerable expertise in purchasing services from
hospitals. With a few exceptions, most state governments do not have such expertise.
Hence for the moment, RSBY should continue to use the insurance model to provide
cashless medical services to the poor, but with strong controls to avoid any field level
discrepancies [Chapter 11 (a)]. In States like Andhra Pradesh which do have the expertise
needed, the State Nodal Agency/Trust or Society could be allowed to play the role of
Insurance Company.
b. Systematic checks should be built into the RSBY both for hospitals and for Insurers.
For Hospitals, following kinds of checks are proposed:
Build in pre-authorization, clinical pathways and mandatory investigations for all
procedures to the extent possible, wherever these exist.[Chapter 5 (d), 6(b)]
Evaluate all empanelled hospitals on a uniform grade sheet and link the grade to the
package rate paid, to encourage improvement in quality of care.
Collect quarterly information on Key Performance Indices from empanelled hospitals.
[Chapter 6(b)]
Conduct medical audit and impose sanctions against hospitals which do not follow
norms. [Chapter 6(b)]
For Insurers, following kinds of checks are proposed:
All medical content like clinical pathways, investigations and grade sheets should be
written into the tender and the agreement with the Insurer. [Chapter 11(b), (f)]
90% of the amount left over from the 85% amount meant for claims, should be
refunded to the state government at end of policy period. At the same time, there
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should be annual financial review linked to claim ratios, for protection against
excessive claim ratios. [Chapter 10(f)]
Monitor Key Performance Indicators of Insurers. [Chapter 9(l)]
Sanctions should be imposed against TPAs and Insurers who do not follow norms.
[Chapter 10(i)]
c. It was noted by the Committee that Third Party Administrators (TPA) contracted by the
insurance companies are permitted by IRDA to handle claims admissions and
recommend to the insurer for the payment of the claim settlement, provided a detailed
guideline is prescribed by the insurer to the TPA for claims assessments & admissions in
terms of capacity requirements, internal control requirements, claim assessment &
admissions procedure requirements etc. under the agreement. As per the IRDA
guidelines, the TPA cannot offer its services for claim settlements and rejections to health
insurance policies.
However, it has been the experience in some states that TPA’s are working in multiple
areas on terms and conditions which are beyond the IRDA guidelines. The Committee
however recommends that the insurance company should fulfil its responsibilities
through its own capacity and use the TPA only as per the guidelines of IRDA. The
Committee also recommends that MoLE should take up the issue of TPA participation in
RSBY with IRDA and keep a close watch on their activities, since most of the grievances
involve TPA’s. The Committee further recommends that there shall be no sub-contracting
by the TPA. It is also recommended that IRDA should provide a complete report on the
TPA, since this is seen as a major constraint in delivering optimal outcomes to the
beneficiary.
d. The Committee also noted the growing involvement of Re-insurers in RSBY with some
states. While, Re-insurance is permitted by IRDA and that it is desirable to have re-
insurance in the health insurance sector, the current mode of operations of the re-insurers
are counter to the overall policy objectives of RSBY. The Committee hence recommends
that the involvement of re-insurers be taken up by MoLE with DFS along with the cost
benefit analysis to the ultimate beneficiary. IRDA should provide a complete report to
MoLE on the functionality of re-insurance since this impacts the beneficiary under
RSBY.
e. The Committee also recommends strict parameters for periodic assessment of
performance of insurance companies [Chapter 9(l)]. The penalty framework based on the
KPI’s would need to be further worked upon by MoLE along with subsequent weightages
to each KPI and penalty clauses.
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f. The Committee also noted that Wellness Check may be conducted for all members of the
beneficiary family (if feasible), else conduct the wellness check for atleast one member of
the beneficiary family through OPD insurance.[Chapter 5(d), Point 7].
For all these recommendations and checks to work, it is essential that the role of the State Nodal
Agency (SNA) be strengthened. The present allocation of tasks in the RSBY outsources
everything to the Insurer and leaves little scope for the SNA to carry out its role of monitoring,
collecting feedback and improving implementation on basis of feedback received. The scheme
can be monitored regularly only by creating systematic avenues for feedback which in turn is
best possible if the SNA were to run the call center. The present structure of the scheme dis-
allows much feedback from reaching either SNA or the National level Grievance Committee at
the Ministry of Labour.
Insurance companies and hospitals cannot be expected to regulate themselves or to reach out to
beneficiaries. Nor can these tasks be left to the Third Party Administrator who has no stake in the
system. This is a task for the State Nodal Agencies which have signed the contract with the
Insurer and which do have a stake. To enable the SNAs to perform this role, basic tasks like
distribution of beneficiary cards, publicity, running the IT platform and getting medical audit
carried out, should be done by the SNA. The task of hospital empanelment should be jointly
carried out by Insurer and SNA since the SNA is best placed to know about infrastructure
available and gaps if any. The payment to SNA for all these tasks should be separate and should
not be loaded onto the premium.
The basic issue is that such a complex scheme requires a sound system of rules and regulations,
in order to work well. RSBY has many potential benefits to offer to society. But in order that
those benefits reach the people, just rules and regulations which encourage patient centric
healthcare need to be defined and factored into the running of the scheme. Whether it is norms
governing hospital empanelment, linking hospital payments with good practices, defining
clinical pathways or the numerous other rules which are the essence of any healthcare scheme,
all these rules are crucial to good governance. Given that RSBY is a very significant intervention
in the field of healthcare and if that intervention is to achieve positive results, it should be
governed by norms which promote good health practices. The writing on the wall is clear
enough. But do we have the will to act upon it that remains to be seen.
To address the implementation and policy level interventions, the Committee suggests the way
forward for the revamp of RSBY once the revised IT architecture is in place.
S.
No. Recommendation Changes required in
1
Clinical pathways and mandatory
investigations
(a) RFP & MCA for Insurers including agreement
between Insurer & Hospitals.
(b) RSBY Operations Manual
(c) Software for Hospital Transactions
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S.
No. Recommendation Changes required in
2
Pre-authorization for all elective
procedures
(a) RFP & MCA for Insurers including agreement
between Insurer & Hospitals.
(b) RSBY Operations Manual
(c) Software for Hospital Transactions
3
Joint committee of doctors to
review rejected pre-authorizations
(a) RFP & MCA for Insurers including agreement
between Insurer & Hospitals.
(b) RSBY Operations Manual
4
Entrusting SNA with the task of
card distribution
(a) RFP & MCA for Insurers
(b) RSBY Operations Manual
(c) Incorporate in new MCA for Smart Card Service
Provider (if different from Insurer)
5
Permanent kiosk at every block
headquarters
(a) RFP & MCA for Insurers
(b) RSBY Operations Manual
(c) Incorporate in new MCA for agency running kiosks (if
different from Insurer)
6
Provide Wellness check /OPD
services to all RSBY beneficiaries.
(OPD services have been approved
for the Convergence Pilot in 20
districts). Preference is to be
provided to hospitals for OPD in
the order of :
a. Govt. Hospital
b. Not for Profit
c. Private Hospital
(a) RFP & MCA for Insurers including agreement
between Insurer & hospital.
(b) RSBY Operations Manual
(c) Software for Hospital Transactions
7
Key performance indicators for
hospitals
(a) RFP & MCA for Insurers including agreement
between Insurer & hospital.
(b) RSBY Operations Manual
(c) Software for Hospital Transactions and Performance
Evaluation of Hospitals.
8
Revise package costs for hospitals
which are too low as compared to
costs
(a) RFP & MCA for Insurers
(b) RSBY Operations Manual
9
Medical audit of pre-
authorizations
(a) RFP & MCA for Insurers including agreement
between Insurer & Hospitals.
(b) RSBY Operations Manual
10
Redefine packages which are
abused like independent ward stay
and ICU stay
(a) RFP & MCA for Insurers including agreement
between Insurer & Hospitals
(b) RSBY Operations Manual
11
Clinical data on epidemiology and
treatment protocols
(a) RSBY Operations Manual
(b) Software for Hospital Transactions, Analysis of
Hospital claims data
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S.
No. Recommendation Changes required in
12
Data mining software for analysis
of medical data RSBY Operations Manual
13
Key performance indicators for
Insurers
(a) RFP & MCA for Insurers including agreement
between Insurer & Hospitals.
(b) RSBY Operations Manual
(c) Software for Performance Evaluation of Insurers
14 Empanelment criteria for hospitals
(a) RFP & MCA for Insurers including agreement
between Insurer & Hospitals.
(b) RSBY Operations Manual
(c) Software for Hospital Empanelment
15
Grading sheet for hospitals and
linking it to package rates along
with long term plan for
independent grading agency
(a) RFP & MCA for Insurers including agreement
between Insurer & Hospital.
(b) RSBY Operations Manual
(c) Software for Hospital Empanelment
16
Norms for single speciality
hospitals
(a) RFP & MCA for Insurers including agreement
between Insurer & Hospital.
(b) RSBY Operations Manual
(c) Software for hospital empanelment
17
Infrastructure audit for speciality
empanelment
(a) RFP & MCA for Insurers including agreement
between Insurer & Hospitals.
(b) RSBY Operations Manual
(c) Software for hospital empanelment
18
Abolishing collection of Rs. 30
from the beneficiary and provision
of Rs. 50 by MoLE to SNA
RFP & MCA for Insurers
RSBY Operations Manual
Software for premium calculation
19
Penalties towards insurance firms
including refund of premium and
annual financial review of insurer
(a) RFP & MCA for Insurers including agreement
between Insurer & Hospitals.
(b) RSBY Operations Manual
(c) Software for MIS reports and penalty calculation
20
Payment to TPA on per case basis
instead of per authorization basis
(a) RFP & MCA for Insurers including agreement
between Insurer & TPA
(b) RSBY Operations Manual
(c) Software for claim settlement
21
Adjudication guidelines for claim
settlement
(a) RFP & MCA for Insurers including agreement
between Insurer & TPA
(b) RSBY Operations Manual
22
Sanctions on TPA& Insurers
including blacklisting
(a) RFP & MCA for Insurers including agreement
between Insurer & TPA, SNA & Insurer
(b) RSBY Operations Manual
23
Provide copies of agreement
between Insurer and TPA to
SNA/MoLE
(a) RFP & MCA for Insurers including agreement
between Insurer & TPA
(b) RSBY Operations Manual
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S.
No. Recommendation Changes required in
24
Hiring of independent agency to
develop and maintain uniform IT
architecture
(a) RFP & MCA for Insurers including agreement
between Insurer & TPA, Insurer & hospital
(b) RSBY Operations Manual
25
Segregation of financial functions
with insurer , whereas card
distribution, medical audit and
other residuary functions with
SNA
(a) RFP & MCA for Insurers including agreement
between Insurer & TPA, Insurer & hospital
(b) RSBY Operations Manual
26
Removal of limit of five members
per family for enrolment
(a) RFP & MCA for Insurers including agreement
between Insurer & TPA, Insurer & hospital
(b) RSBY Operations Manual
27
Claims appeal committee to be
formed for hospitals
(a) RFP & MCA for Insurers including agreement
between Insurer & TPA, Insurer & hospital
(b) RSBY Operations Manual
28
Feedback mechanisms by keeping
call center with SNA
(a) RFP & MCA for Insurers including agreement
between Insurer & TPA, Insurer & hospital
(b) RSBY Operations Manual
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a. SUMMARY OF RECOMMENDATIONS MADE IN THE REPORT
1. CLINICAL PATHWAYS AND MANDATORY INVESTIGATIONS BE ADOPTED
WHERE EXISTING/DEVELOPED AND MADE PART OF TENDER DOCUMENT
TO EXTENT POSSIBLE
2. INTRODUCE PRE AUTHORISATION FOR ELECTIVE PROCEDURES WITH
SOME EXCEPTIONS FOR LOW COST PROCEDURES
3. REMOVE LIMIT OF FIVE MEMBERS PER FAMILY FOR ENROLMENT
4. ABOLISH PAYMENT OF RS 30 BY BENEFICIARY FAMILIES FOR CARD
5. PROVIDE OPD SERVICES IN RSBY
6. LAY DOWN ADJUDICATION GUIDELINES FOR CLAIM SETTLEMENT
7. CLAIMS APPEAL COMMITTEE SHOULD BE FORMED FOR HOSPITALS
8. DRAFT AGREEMENT BETWEEN HOSPITALS AND INSURER SHOULD HAVE
PROVISION FOR REPORTING ON KEY PERFROMANCE INDICES.
9. REVISE HOSPITAL RATES FOR PACKAGES WHICH ARE TOO LOW AS
COMPARED TO COSTS
10. INITIATE MEDICAL AUDIT OF PRE-AUTHORISATIONS AND HOSPITALS AND
LAY DOWN SANCTIONS FOR DEVIATION
11. RE-DEFINE PACKAGES WHICH ARE MUCH ABUSED LIKE INDEPENDENT
WARD STAY AND ICU STAY
12. MINISTRY OF LABOUR SHOULD HIRE AGENCY INDEPENDENT OF INSURER
TO DEVELOP AND MAINTAIN UNIFORM IT ARCHICTECTURE
13. DATA MINING SOFTWARE NEEDED
14. USE OF COMPREHENSIVE GRADE SHEET APPLICABLE TO ALL HOSPITALS
15. INFRASTRUCTURE AUDIT FORM NEEDED FOR SPECIALTY EMPANELMENT
16. LINKING GRADE WITH PACKAGE RATE FOR HOSPITALS
17. RUN CAPABILITY BUILDING PROGRAMS FOR ALL HOSPITALS
18. LONG TERM PLAN FOR INDPENDENT GRADING AGENCY
19. INCORPORATE REFUND AND ANNUAL FINANCIAL REVIEW CLAUSES IN
AGREEMENT WITH INSURER
20. KEY PERFORMANCE INDICATORS NEEDED FOR INSURERS, HOSPITALS AND
OTHER STAKEHOLDERS
21. CHANGE THE RENUMERATION PATTERN OF TPAs TO PER PRE
AUTHORISATION AND PER CLAIM BASIS
22. IMPOSE NON MONETARY SANCTIONS LIKE BLACKLISTING ON
DEFAULTERS
23. FINANCIAL FUNCTIONS REMAIN WITH INSURER BUT CARD DISTRIBUTION,
MEDICAL AUDIT AND RESIDUARY TASKS WITH STATE GOVERNMENT.
EMPANELMENT TO BE JOINT ACTIVITY.
24. CREATE AVENUES FOR FEEDBACK BY KEEPING CALL CENTER WITH SNA
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2. INTRODUCTION
The Rashtriya Swasthya BimaYojana (RSBY) is currently functioning in 24 states out of 29
states and UTs in India. Three states of Andhra Pradesh, Maharashtra and Tamil Nadu left the
scheme after initially agreeing to implement it. Other states have been implementing the scheme
but they have many reservations about the scheme. RSBY is expected to provide cashless
medical services against catastrophic health expenditure to the most vulnerable sections of the
population. This objective can be achieved fully only if feedback from states is incorporated in
the scheme so that they can wholeheartedly agree to implement the scheme. This is the main
reason why this committee has been set up.
In order to revamp RSBY to ensure better patient care
services, it is important to re-examine the conceptual
framework of the scheme in the light of the
experiences of the states and other feedback about the
scheme from different sources. Discussions were held
with all states who were part of the committee and
written feedback was invited from them.
In addition to what the states have said, feedback
about the scheme as reflected in journal and
newspaper articles has also been taken.
FEEDBACK ABOUT THE RSBY:
1. State governments feel that while the objective of the scheme is excellent, the
implementation machinery is not up to the mark.
2. State governments felt that there was little accountability of the Insurance companies to
the beneficiaries and state governments.
3. State governments felt that Insurance companies make too much profit out of the scheme
and there should be a mechanism to ask them to refund extra profits over and above a
certain limit.
4. State governments felt that RSBY is too hospital centric in implementation. There is little
focus on treatment outcomes. Nor does the scheme generate data about epidemiology and
treatment outcomes which could be shared with states for improving health policy.
5. The Labour Department is implementing the scheme in many states and the involvement
of Health Department is limited while the skills for monitoring scheme implementation
are with the Health Department. The Health Department being the single nodal agency
for all health interventions, and the primary regulatory body for hospitals, the stewardship
of the Health Department would result in better coordination of scheme and
implementation.
TERMS OF REFERENCE OF THIS
COMMITTEE: This Committee was
constituted by Ministry of Labour and
Employment, Government of India vide
Intimations dated 26th and 27th August and was
entrusted with making recommendations “ to
revamp RSBY” with a view to (1) improve
service delivery, (2) ensure greater efficiency
and transparency and (3) to provide RSBY as a
platform to states for other schemes. Detailed
Terms of Reference are at ANNEXURE 1.
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6. Several evaluations have said that there is a need to increase awareness about the scheme
among potential beneficiaries so that those who are genuinely in need could avail of the
scheme.
7. Evaluations have also observed that many patients, who availed treatment under the
scheme, still had to incur out of pocket expenditure for services. One such study from
Gujarat said, “nearly 60% of insured patients had to spend about 10% of their annual
income on hospital expenses, despite being enrolled"1.
On the basis of above feedback, the following aspects of the scheme have been identified
for discussion in order to make suggestions about the revamping needed:
Implementation Issues:
1. The interface with patients and the experience of patient care services.
2. The interface with hospitals and issues faced by hospitals.
3. The role of Information Technology in generating data about treatment outcomes and
also in monitoring quality of services provided.
4. The protocols for operating RSBY at the field level and effective controls for each
participating stakeholder within the scheme.
Policy Issues:
5. The Interface with the Insurer or tasks allocated to each agency in the light of the core
competence of each agency.
6. The incentive structures in place for various stakeholders: Hospital, Insurer and TPA.
After elucidating each issue, we would then try to sum these up to examine and suggest how the
RSBY could be revamped to improve patient care services, to improve efficiency and
transparency in service delivery.
1 Devadasan Narayanan, Tanya Seshadri, Mayur Trivedi and Bart Criel; "Promoting universal financial
protection: evidence from the Rashtriya Swasthya Bima Yojana (RSBY) in Gujarat, India", Health
Research Policy and Systems 11(29) doi:10.1186/1478-4505-11-29, 2013.
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a. BACKROUND AND PAST EXPERIENCE
The RSBY has notched up some significant successes. It has been able to provide protection
against high health expenditure to about 3.85 crore families which constitute the most vulnerable
sections of the population, at very reasonable prices. Around 22 lakh people are treated in the
scheme every year. The RSBY is very economical. At a time when healthcare costs are
skyrocketing, there is a great need to look for cost effective means of managing the healthcare
needs of the population. But there are many weaknesses in the scheme mainly on account of lack
of built in checks for hospitals or Insurers.
b. STRENGTHS OF RSBY
1. SIGNIFICANT FINANCIAL PROTECTION AND REDUCTION IN OUT OF
POCKET EXPENDITURE: Through this scheme, the government has been able to
provide cashless medical services to needy people, who would not otherwise have been
able to afford the service. An evaluation of the scheme by National Labour Institute
(NLI) NOIDA said that 97% of those surveyed possessed RSBY cards.2
2. AN ECONOMICAL MODEL: By fixing package prices, RSBY has made a major
conceptual advance on existing healthcare delivery models. The concept of package
prices for an indicative length of stay makes healthcare costs transparent and this imposes
a natural check on prices. The average cost per treatment is around Rs. 4000. Premium
remains on an average Rs. 500 per family per annum.
3. ENCOURAGING BETTER MAINTENANCE OF PATIENT RECORDS: The NLI
report said that as many as 86% patients were provided a discharge summary. Records of
treatment are very important to maintain continuity of care and this is one of the most
important areas that need attention in healthcare in India today.
c. OBSERVED WEAKNESSES OF RSBY
1. LITTLE OR NO INVOLVEMENT OF THE SNA: The SNA being the backbone of
the scheme at the States lacks adequate capacity to monitor the activities within the
scheme. Another cascading issue is that of the performance data, which is not provided
by the Insurance Company to the SNA, which leaves the SNA with no scope for any
further action.
2. INVOLVEMENT OF TPA IN OPERATING THE SCHEME AT STATES: The
TPA’s are employed by the Insurance Companies to process the claims raised by the
hospitals and other administrative tasks. It has also been observed that in some States, the
TPA’s are also conducting enrolments on behalf of the Insurance Company. The
Committee has also observed that TPA’s in some states have sub-contracted their
responsibilities to other agencies unknown to the SNA. This has diluted the focus of the
Insurance Company towards providing the benefits of the scheme to the end beneficiary.
2 Ghosh, Ruma, "Evaluation Study of Rashtriya Swasthya Bima Yojana, A study of Jharkhand,
Maharashtra and Punjab", V V Giri National Labour Institute, NOIDA.
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3. EVOLVING CONCEPT OF RE-INSURANCE IN RSBY: It has been observed that
Insurance Companies associated with RSBY are passing their risk to Re-insurers. The
Re-insurers are paid an amount to cover the risk for the RSBY insurer, which leads to
low claim ratio at the States.
4. LOW UTILIZATION: RSBY was designed to provide the beneficiary cashless health
insurance and to minimize their out of pocket expenses during a visit to the hospital. On
the contrary, it has been observed, that very few (3.6% for 2013-14) beneficiaries out of
the 3.75 crore card holders have availed hospitalization under the scheme. It has also
been observed that the hospitals demanded out of pocket expenses to initiate treatment
for these beneficiaries, which has ultimately led to low utilization of the scheme.
5. LOW LEVEL OF AWARENESS ABOUT RSBY: Despite the scheme being managed
from the State, the awareness of the benefits of the scheme are not known to many
beneficiaries. This has also contributed to the low utilization of the scheme. Though the
responsibility of creating awareness of the scheme lies with the Insurance Company, the
utilization data does not depict awareness of the scheme. Additionally, the SNA who
could have played a key role in increasing awareness of the scheme lacked the
institutional support and the capacity.
6. LACK OF CAPACITY AT MOLE: The Ministry of Labour & Employment (MoLE),
which is the scheme ministry, too lacked the institutional structure and adequate capacity
to manage the scheme. This resulted in the scheme being outsourced to a third party and
MoLE having reliance on the data supplied by this third party.
7. DISSATISFACTION IN THE STATES: There has been dissatisfaction expressed by a
few state governments regarding the structure of the scheme, from time to time. Three
major state governments of Tamil Nadu, Maharashtra and Andhra Pradesh have refused
to participate in the scheme and have preferred to run their own state government funded
health insurance schemes. Other governments have flagged issues about the
implementation methodology adopted in the scheme. Excessive authority given to
Insurance companies and poor monitoring methodology are among the chief complaints.
8. LITTLE DATA ON TREATMENT OUTCOMES: 33.81% patients in study by the
National Labour Institute reported an average rate of satisfaction while 55% reported that
they healed completely. The Information Technology and data collection methodology of
the scheme remains very weak. There is little data available on treatment protocols or
medication provided; variation in these protocols and how these have affected treatment
outcomes. No system seems to be in place to follow up on patients requiring follow up
treatment. As a result it is difficult to evaluate the reasons for 33.81% patients reporting
that the treatment provided was average in quality.
9. NO CLINICAL PATHWAYS IN THE SCHEME: A scheme which intends to provide
good healthcare to people, should have some clinical pathways for the various procedures
especially in view of the fact that services are being purchased from private sector
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hospitals. However this has not been the case so far. This could be one reason why the
quality of services provided remains quite variable.
10. REPORTS OF FRAUD AND MEDICAL MALPRACTICE: A report by Amicus
Advisory and several media reports have flagged the issue of large number of ghost
cards3. There are also cases of suspect procedures being performed needlessly although
without treatment protocols, there is no way of judge if there is any truth in the charges.
11. PERVERSE FINANCIAL INCENTIVES: One of the major problems reported has
been that while the scheme incentivizes hospital treatment to patients, it has no incentives
for medical management since OPD costs are not covered. Many evaluations have
reported high use of surgical packages.
Due to a great deal of dissatisfaction among state governments, the Government felt a
need to study the experiences of various state governments providing health coverage to
people and on the basis of these inputs, to look at revamping the RSBY, adopt best
practices and to address the weaknesses reported.
3 Reports in The Hindu and other newspapers in Sept 2013, available at URL:
http://www.thehindu.com/news/national/government-paid-private-insurer-crores-in-premium-for-ghost-
beneficiaries/article5083382.ece
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4. IMPLEMENTATION ISSUES
The first part of this report would discuss the problems faced in implementation of RSBY and
possible solutions to these problems in the light of the experience of the different states. In the
light of these experiences, policy issues would be discussed in the second part of the report.
5. ISSUE NO 1: MAKING RSBY MORE PATIENT FRIENDLY
a. TREATMENT OUTCOMES REPORTED For any health scheme, the most
important question to be asked would be regarding treatment outcomes of healthcare
services provided. An evaluation study of RSBY in the states of Jharkhand, Maharashtra
and Punjab conducted by the VV Giri National Labour Institute (NLI) NOIDA revealed
that while 55% patients treated said that their condition improved completely after
treatment, 33.81% patients said that the satisfaction rate was average.
The satisfaction rates were: Excellent (10.29%), Very good (25.87%), Good (28.21%), and
average (33.81%). Given little data on treatment outcomes, we cannot know reasons for average
rates of satisfaction where these existed.
Feedback from different state governments shows that some common complaints from patients
were:
a. Dissatisfaction with treatment provided
b. Hospitals not following standard protocols
c. Charging of money even though it is cashless scheme
d. Denying Follow up treatment
e. Difficulty in getting enrolled with Insurer/ TPA
These complaints against hospitals can be grouped into three different categories.
The first two categories have to do with hospitals not following Standard Operating
Procedures.
The second category of complaints has to do with over charging and denying follow up
treatment.
The third category of complaints has to do with difficulties in enrolment process.
b. VARYING QUALITY OF HEALTH SERVICES IN PRIVATE/ PUBLIC
SECTORS Surveys of the healthcare industry in India have shown that the quality of
service provided in different facilities varies a great deal and that many hospitals do not
follow SOPs. Standard Operating Protocols or SOPs as these are called are important
Final Draft Report
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since these put patients first. RSBY makes no attempt currently to define clinical
protocols for different procedures.
Many of these complaints can be addressed by defining the mandatory investigations and clinical
pathways for each of the procedures offered in RSBY. Maharashtra and Andhra Pradesh have
both defined the mandatory investigations for all procedures offered. Maharashtra has also
defined clinical pathways for some 150 high uptake procedures while others are being
developed.
These pathways are sets of questions and answers to enable the physician to determine whether
or not the treatment proposed is appropriate keeping clinical parameters of the patient in mind.
All the clinical pathways developed in Maharashtra are available on the site
http:jeevandayee.gov.in under the tab Clinical protocol guidelines. A sample angioplasty
protocol is attached at ANNEXURE 2 and pediatric management guidelines in use in Tamil
Nadu are placed at ANNEXURE 2A.
The list of mandatory investigations in Andhra Pradesh, investigations for 308 RSBY procedures
as prescribed in Maharashtra (being common with state Health Insurance scheme) and Tamil
Nadu are placed at ANNEXURE 3A, 3B and 3 C respectively.
Regarding over-charging to patients, there are many complaints on this ground. One basic reason
is that payment for Outpatient services is not included in RSBY and there are many gaps in these
facilities in the present public healthcare system.
c. ENROLMENT PROBLEMS
The low enrolment ratios of around 62.3% in RSBY are directly related to the flaws in the
mechanism for data collection and procedures for distribution of smart cards to beneficiaries. So
far as data collection is concerned, this activity is entirely dependent on the efforts of state
government agencies and State Nodal Agencies can only facilitate those efforts. However
efficiency in distribution of smart cards can definitely be improved by entrusting this task to the
State Nodal Agency and by empanelling a public sector undertaking to assist the SNA with this
task. The issues arising from faulty smart card distribution and the learnings from that process
are summarized in the table given below:
What went wrong What were the learnings
Inefficient data collection & de-duplication
process leading to discrepancies in the post
enrolment data
Enrolment of bogus beneficiaries
Low coverage of enrolment of beneficiaries
Disjointed IT architecture at field and central
level
Disparity in performance data obtained from
various sources
Reliance on insurance companies to conduct
major activities of RSBY leading to conflict of
interest
Program of such large scale and diversity of
operations requires effective monitoring tools
with various stakeholders
Data (beneficiary as well as performance data) is
of prime importance and this was a grey area in
RSBY
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Low level of accountability among the
external stakeholders towards the program
Low focus on program monitoring leading to
discrepancies at field level and wrong
reporting of performance of program
Non-adherence to protocols in the RSBY
process by stakeholders
Sub-standard / non –functioning smart cards
issued to beneficiaries
Non-delivery of cards to intended
beneficiaries
No check if the card was actually delivered to
the beneficiary
Conflict of interest with insurance company
also conducting enrolments
No field level check on activities
Lack of biometric authentication for DKM
leading to unscrupulous data
Low threshold of premium amount utilized by
insurance companies towards payment of
claims / claim settlement
Beneficiaries not aware of empaneled
hospitals leading to dissatisfaction
Absolutely no information of grievances and
complaints at district and state to NGRC
Kiosk as a service provider was totally left out
from the ambit of monitoring
Requirement of a robust application for data
exchange on real-time basis or at least near real-
time basis
Checks required on the field functionaries of
RSBY (i.e. FKO, DKM) and protocols for
uploading data to be strictly emphasized
IEC is an important component of the program
and needs to be well defined with roles and
responsibilities for each stakeholder
Need for centralized procurement of smart cards
through a dedicated agency
IEC activity to ensure the beneficiary is made
aware of the empaneled hospitals and services
available at these hospitals
Being connected with the beneficiary is a much
needed step and this should be done through
various mediums. Voice call, SMS etc.
Performance based SLA’s to be introduced for
each process and stakeholders of RSBY
Beneficiary acknowledgement of resolution of
complaint / grievance is important
Separate the agency that manages kiosks for
RSBY to bring accountability
Challenges in RSBY related to enrolment and
uptake
Actions Needed
Poor Quality of pre-enrolment data leading to
low percentage of enrolment
Inconsistency of data from various sources
leading to requirement of continuous
reconciliation
No category prioritization guidelines defined
and lack of an automated process for de-
duplication
Real-time update of data starting from
enrolment process till claim disbursement
Absence of accurate data has implications on
performance evaluation and levying penalties
on external agencies involved
Beneficiary card blocked with treatment
package, even if the beneficiary has not
availed the treatment. This leads to low
coverage amount remaining with the
beneficiary
No SMS communication to beneficiary due to
lack of mobile number data
Lack of awareness of existing complaint and
grievance redressal channels
Lack of training to grievance committee
members to resolve grievances/ no process
defined for complaint/ grievance follow-up
Document process guidelines and operating
manuals for reference of all stakeholders to
bring a common understanding of RSBY
Provide states with guidelines on data
preparation and strict adherence to the same.
Capture of at least one identifier to facilitate de-
duplication is a must
Capturing mobile number of all beneficiaries at
time of enrolment
Capturing of mobile number of beneficiary
mandatory at the time of registration in hospital
Insurance and enrolment to be separate activities
and performed by separate agencies
Identification of a public sector undertaking for
centralized procurement of smart cards to ensure
quality
Fixing the glitches in the RSBY software (TMS,
DKM upload module and fund flow module) to
enable accurate flow of data from various
stakeholders involved (i.e. post enrolment data,
hospitalization data, claims data etc.)
Printing of contact center toll-free number on
beneficiary card and the card cover for
awareness and complaint logging
Provision for incentives for FKO at the
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and closure
Lack of information dissemination to
beneficiaries (i.e. enrolment dates, hospitals
under RSBY etc.)
No KPI’s fixed for various processes of RSBY
and their stakeholders
Reach of kiosk only at district level.
Beneficiaries at block level have to travel
large distance to avail any post enrolment
service at kiosk. This leads to loss of wages
for the beneficiary
Low level of awareness amongst the
beneficiaries about existence of kiosks at
districts
Kiosk does not have access to post enrolment
data at times, hence it is unable to provide the
requisite services to the beneficiaries
Lack of standard operating procedures and
training to kiosk operators pertaining to RSBY
discretion of the States
IEC activity at hospitals mandated with help
desk and information board highlighting
facilities at hospitals for RSBY beneficiaries
Chart Service level agreements for processes and
stakeholders in RSBY and mandate adherence
Build strong MIS capability at central level
through software and capacity building for
effective KPI monitoring of the program
SMS communication to beneficiary at stages
based on available mobile numbers
Feedback letter needs to be sent to all
beneficiaries
Bring clarity in the role of kiosk operator and
provide operating procedures and assign
responsibility of kiosk with separate agency
Guidelines for information board at kiosk with
services of RSBY to be displayed
Increase accountability of Insurer and
responsibility of SNA towards the program
The learning experiences in the second column indicate the way forward for the RSBY so far as
Smart Card distribution and data updation is concerned.
d. RECOMMENDATIONS ON IMPROVING PATIENT SERVICES
1. CLINICAL PATHWAYS AND MANDATORY INVESTIGATIONS BE
ADOPTED WHERE EXISTING/DEVELOPED AND MADE PART OF TENDER
DOCUMENT: It is recommended that these mandatory investigations and clinical
pathways, where available, be made part of the tender document and agreement with
Insurer/Trust so that all parties know these in advance and rational parameters are
available for decision taking. Each of the clinical pathways could provide for the
practitioner to differ for reasons to be recorded in writing. Any consistent deviations
could be flagged in medical audit. Maharashtra state health insurance scheme has
developed pathways for some 150 procedures which have been in place for some time
and could be adopted. These are available on the website of the RG Jeevandayee Arogya
Yojana Society. Remaining pathways would need to be developed. Mandatory
investigations could be adopted from Tamil Nadu/Maharashtra/Andhra Pradesh. Andhra
Pradesh has incorporated the mandatory investigations in MOU with hospitals.
2. INTRODUCE PRE AUTHORISATION
a. FOR ELECTIVE PROCEDURES: Andhra Pradesh, Tamil Nadu and
Maharashtra, all follow a pre authorization procedure for treatment under their
respective health insurance schemes. This means that a treatment request is sent in
to the Insurer/ Trust and a response is provided within a defined time limit or
Turnaround Time (TAT) as this is called. This varies from 12 hours in Andhra
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Pradesh to 24 hours in Maharashtra. A 12 hour turnaround time would be suitable.
Regarding which are the procedures for which pre authorization should be done, a
committed constituted in Maharashtra to examine the issue has given its
recommendations which are attached at ANNEXURE 4. Wherever clinical
pathways exist, the pre authorization should normally follow the pathway. Where
the physician concerned differs, he should record his reasons in writing.
b. JOINT COMMITTEE OF DOCTORS TO REVIEW REJECTED PRE
AUTHORISATIONS: To prevent demand side moral hazard, one needs to
ensure that patients are treated at the appropriate level. This is an important
activity and needs to be performed scrupulously. The main issue to monitor here
is whether or not the clinical pathway has been followed and the turnaround time
between the receipt of application from the provider and the response. In
Insurance systems, there could be an incentive for arbitrary rejection of pre
authorization. In Maharashtra currently 4% of pre authorizations are rejected
while in Tamil Nadu, 2.66% are rejected. To make this process more objective, a
committee consisting of two doctors from Insurer side and two doctors from SNA
side could vet rejected cases. In addition, a doctor from a public hospital mutually
agreed upon by both parties, could be a fifth member.
c. FOR EMERGENCY PROCEDURES: No pre authorization should be
mandated for emergency procedures since this might increase the time in which
the patient is attended and it could be harmful. Whenever a beneficiary card is
swiped, information goes to Insurer in any case. It would be mandatory to swipe
this card and also to select the procedure applicable within 24 hours of the
emergency procedure being performed.
3. REMOVE ENROLMENT LIMIT OF FIVE MEMBERS: Removing the enrolment
limit of five members may address some of the problems of low enrolment ratio
substantially. This is a policy issue which would be discussed in the second part of the
report.
4. ABOLISH CONDITION OF PAYMENT OF RS 30 FOR CARD BY
BENEFICIARY FAMILIES: The present condition of charging Rs 30 per beneficiary
does not achieve much purpose. Moreover it adds considerably to logistics. This is one
main reason for resistance among many state governments which have no wish to spend
so much effort on logistics for what they consider a nominal fee with little meaning.
5. STREAMLINE METHODOLOGY FOR ISSUING SMART CARDS:
a. Entrusting the SNA with the task of card distribution is important to address the
conflict of interest over enrolment with the Insurer. The Insurer and TPA would
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get higher premium for more enrolment but they have no incentive to verify the
accuracy of the process and too much enrolment publicity leads to higher payouts
which in itself is a disincentive.
b. Centralized procurement of Smart cards be done through a dedicated agency,
preferably a public sector undertaking. The states can also employ PSU firms
within the state for enrolment activities. The funding for this may be obtained
from MoLE.
c. A permanent kiosk should be opened at every block headquarters, preferably at
the Rural Hospital since enrolment is a continuous activity.
d. At least one unique identifier of beneficiary in addition to thumbprints must be
captured at the time of enrolment for de-duplication.
e. Any of following documentary evidence could be asked for any subsequent
confusion in case the fingerprint mechanisms fail which they often do:
i. Voter ID
ii. Copy of Aadhaar card
iii. Birth certificate for those below 18
iv. Statement of School headmaster regarding date of birth if birth certificate
unavailable
v. Enrolment slip for registration of Aadhaar card
f. A letter for feedback purposes should be sent by SNA to every patient treated
under the scheme. This is routinely done in states like Maharashtra and the patient
gets an opportunity to reply to the SNA.
g. Telephone calls can be made to random sample of patients regarding quality of
care received.
6. PROVIDE OPD SERVICES: An important reason for over-charging here, assuming
that hospitals are sincere, is that RSBY does not provide OPD services and there is a
considerable cost for consultation, medicines and diagnostics. Providing outpatient
services would help provide continuity of care to patients and to reduce out of pocket
expenditure. It is certainly true that OPD services are both costly and difficult to audit.
However it is also true that outpatient services account for a significant portion of out-of-
pocket expenditure in various surveys carried out by National Sample Survey and other
studies. What we recommend is that outpatient services be provided in steps, with
consultation being provided in the first step, medicines in the second step and diagnostics
in the third step. Public Health facilities should be the preferred choice of service
provider and only where public health facilities or doctors are unavailable, should
charitable trusts and private practitioners be enrolled.
7. INTRODUCTION OF WELLNESS CHECKS: The concept of wellness check was
introduced to let the beneficiary visit the PHC/ CHC/ Hospital in their vicinity and
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experience the healthcare facilities provided to them under RSBY. Ideally, wellness
check should be conducted to for all members of the beneficiary family or any one
member of the beneficiary family, through OPD insurance. This will not only improve
access but also help the beneficiary avail health services, but will also provide data on the
health seeking behavior of the beneficiary or their family member.
8. AUGMENT CAPACITY OF SNA: The capacity of the State Nodal Agency (SNA) is
of prime importance, as this will be the focal point for monitoring of the scheme. It is the
SNA that can detect discrepancies and take adequate measures, if sufficiently staffed. The
SNA staffing can be augmented on the model followed by the Planning Commission,
Government of India for hiring of consultants.
e. SUGGESTED SCOPE OF OUT PATIENT SERVICES
OPD services could be designed to meet the following costs:
1. Cost of Consultation: to be met by RSBY. An annual ceiling of Rs 7,500 per family
insured could be provided under RSBY under this head. Since the incidence rate at all
India level is estimated to be approx. 7.5% as per NSSO data of 2003 survey, this
provision should be sufficient. However the committee members felt that this amount
would be inadequate for a complete wellness check for all family members. A limited
check on risk factors and conditions included under the Non Communicable Disease
program such as diabetes, hypertension, cancer could be conducted at Primary Health
Centers but this should not be mandatory or linked to enrolment since time period taken
to cover all 3.85 crore families could be very long.
2. Cost of Medicines: to be met by Free drug program of National Health Mission
The cost of diagnostics is much larger and far more vulnerable to moral hazard. It would be best
to include these at a later stage and only as a third step.
Suggested scope of OPD services is placed at ANNEXURE 5. In case it is necessary to empanel
private practitioners for OPD services due to a shortfall in required numbers of doctors, private
practitioners should be empanelled only for consultation purposes and for medication, they
would need to refer the patient to the government pharmacy.
SUGGESTED NORMS FOR DOCTOR POPULATION RATIO
To begin with, a norm of 10,000 population or approximately 2000 households per practitioner
could be used to identify the numbers of practitioners required.
With 3.85 crore households covered in RSBY this would seem to mean that 19250 doctors would
be needed. However we need to remember here that government doctors serve the entire
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population and not just these 3.85 crore households so it would be fair to assume that the
vulnerable sections of the population only constitute one half of the patients serviced by the
doctors in the government sector. It would be fair then to have a ratio of not more than 1000
households per doctor or a total of 38500 doctors. Of these 69% approximately may be needed
in rural areas and 31% in urban areas. This means 26565 doctors in rural areas and 11935 doctors
in urban areas would be needed.
As per National Health Profile 2012, 106813 allopathic doctors were available in India in the
government sector but out of these doctors, 29562 doctors were at Primary Health Centers in
Rural areas and 5805 specialists were available at CHCs4. No data was available regarding urban
areas. This indicates that there could be a mismatch between availability and requirement of
government doctors.
If we count all the doctors at PHCs against the required figure of 26565 doctors in rural areas,
that should be sufficient for OPD services.
For urban areas, 11935 doctors would be needed at level of the Primary Health Unit. This need
could be addressed through the National Urban Health Mission and any gaps would need to be
addressed by empanelment of private practitioners. Approx. 5000 doctors could be made
available through govt sources here and remaining 6935 could be hired from charitable trusts and
private sector. This means a total of 31565 doctors from government and 6935 from the private
sector could be asked to provide OPD services under RSBY.
For providing OPD services as per population norms, practitioners could be empanelled in
following order of priority:
1. Government Doctors
2. Doctors Employed by Non-Governmental Organizations/ Charitable Trusts
3. Private practitioners
In all cases however, it should be mandatory for hospitals to keep a record of patients
examined in terms of some basic parameters:
1. Name of Patient
2. Age of Patient
3. Sex of Patient
4. Name of Father
5. Name of Mother
6. Residential Address
7. Patient UID in RSBY
4 National Health Profile 2012, released by Central Bureau of Health Intelligence, Ministry of Health and
Family Welfare, Govt of India.
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8. ICD Code of disease identified (This should be available as drop down menu)
9. Medication prescribed as per the Essential Drug List
10. Investigations/Tests prescribed
11. Aadhaar number where available
Web enabled software which can also work in offline mode would be needed. One version of
this is already available with CDAC, a government IT company, under a contract with
Government of Maharashtra, RG Jeevandayee Arogya Yojana Society.
Using this software would enable the practitioner to upload these details via the internet every
few days to claim his bills.
It would be mandatory for them to use the ESSENTIAL DRUG LIST prescribed by concerned
state government. On these conditions, private practitioners could be allowed to refer patients to
government pharmacies for obtaining prescribed medication.
REIMBURSEMENT OF OPD SERVICES FOR GOVT INSTITUTIONS: For primary
services, it may not be appropriate to reimburse government institutions on a per case basis since
that may well lead to distortions and inequity in patient care services. However funds could be
offered for institutional support. Such support could be both a one-time grant for computers ,
modem and printers and also a recurring grant for hiring data entry operators for record-keeping.
This would mean a cost of Rs 60,000 for computer, printer and internet connection as a one-time
cost and recurring costs of Rs 1.2 lakhs per annum per data entry operator @ Rs 10,000 per
month thereafter.
REIMBURSEMENT OF OPD SERVICES FOR PRIVATE DOCTORS: A consultation fee
of Rs 100 per incidence could be given to private practitioners and doctors employed by NGOs
only. OPD services under RSBY can be introduced as a separate package with a fixed package
cost in the range of Rs 7500 per family per annum to be utilized @ Rs 100 per incidence, within
the existing sum insured. An incidence may be defined as an illness for which the beneficiary has
approached the doctor for consultation and may include more than one consultation visits. The
incidence shall be counted as complete and eligible for payment when the illness for which
beneficiary has approached has been treated or referred to higher centre. A sum of Rs 250/-
could be paid for a specialist consultation. For availing the claim the treating doctor would have
to submit the consultation documents in the form of illness diagnosed, medical examinations
done with recorded parameters as mentioned above. These consultation documents should be
machine generated i.e. there should be a software application (may be called e-prescription
application under RSBY) loaded on the system of the empanelled doctors who will enter and
upload the necessary patient related parameters & reports for sending them online for claim
settlements. An offline version of the module could be made available so that doctors could
upload the claims as and when internet connectivity is available. An added 3% cost for
administrative and record keeping measures could be given to private practitioners.
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ESTIMATED EXPENDITURE ON OPD SERVICES
The NSSO data for the 2003 survey indicates an incidence of 7.5% of disease in the general
population requiring OPD services. Let us assume a figure of 10% for the country as a whole,
given that free providing of services would in itself encourage an increased uptake.
For 3.85 crore households, this suggests a possible 38.5 lakh claims. We assume that 60% claims
would be taken care of by government doctors.
For remaining 40% claims or say 15.4 lakh claims generated by private practitioners, a cost of
Rs 2000 lakhs or Rs 15.4 crores would be incurred in a given year. Adding 3% would mean 46.2
lakhs= Rs 15.86 crores.
INSTITUTIONAL SUPPORT FOR GOVT INSTITUTIONS
Rs 60,000 per centre for 31565 centers= Rs 189.39 crores one time grant
Recurring cost of data entry operators @ Rs 1.2 lakh per operator= Rs 378.78 crores
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6. ISSUE NO 2: DEALING WITH HOSPITAL GRIEVANCES
Hospitals being the main care providers in RSBY, it is very important to have fair and
transparent conditions for them from the very beginning. However the RSBY model so far has
left all dealing with hospitals to the Insurer. Insurers in turn have sub-contracted this out to Third
Party Administrators (TPAs). The result is that the terms and conditions of service are left
ambiguous. Since the Insurers and TPAs have a strong incentive to contain costs, this often leads
to arbitrary and unnecessary deductions in hospital bills and also delayed payments. Arbitrary
treatment in turn leads to fraudulent practices on the part of hospitals.
The main complaints of hospitals against TPAs/Insurers are:
a. Very high technology assessments used like CT, biopsy even where not strictly
required. This in turn limits services provided to the larger cities.
b. Irrational and non-transparent deductions from bills.
c. Demand of money for processing of bills.
d. Delayed payment of bills. Failure of TPA/Insurer to update details of pending
bills in IT application.
e. Low rates of packages.
In turn this often leads to deviations on the part of hospitals.
a. COMMONLY REPORTED ABUSE BY HOSPITALS
COLLECTING MONEY FROM PATIENTS This is a frequently reported problem in RSBY.
The NLI report says that 36% patients in RSBY have had to incur out of pocket expenses over
and above the package price. The study from Patan Gujarat gives an even higher incidence of
60%.
ABUSE OF PACKAGES BY UNNECESSARY BLOCKING OF MULTIPLE PACKAGES
This is a phenomenon which is reported in a study done by Amicus Advisory on RSBY5.
Procedures which are most commonly abused are the unspecified ward stay and ICU stay. Ward
stays and ICU stays are often claimed independently of any other procedure and since no
evidence is demanded, this is a common mechanism hospitals use. A study of RSBY in Amravati
in Maharashtra pointed out that there was no audit of the TPA transactions and as a result
inaccurate claims tended to be filed, "listing patients with ophthalmic symptoms and abdominal
5 Amicus Advisory Pvt. Ltd. "The need for Surveillance, Concurrent & Retrospective Audit of Claims
and Process Compliance under Rashtriya Swasthya Bima Yojana (RSBY). Accessed on 7th Sept 2014.
Available on URL, https://www.insuranceinstituteofindia.com/downloads/Forms/III/Important%20Notice/Fraud%20Control%20Works
hop/Need%20for%20RSBY%20claims%20survellience,%20concurrent%20and%20retroactive%20audit%20-
%20Amicus%20Advisory%20Report.pdf
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pain as undergoing surgical procedures, or those with fever and minor discomfort as having ICU
stays"6.
In view of all the above, a possible strategy could be to have more transparent and clearer terms
of service for hospitals which are spelt out in the agreement itself. Secondly the scope for abuse
should be reduced by eliminating or re-defining packages which are abused. Finally regular
monitoring of transactions should be done by State Nodal Agency by regular data collection and
also through medical audit.
b. RECOMMENDATIONS ON HOSPITAL GRIEVANCES
1. DEFINE MANDATORY INVESTIGATIONS: These investigations should be linked
to every procedure in the IT application so that hospital and insurer know what these are.
These should form part of the tender and the agreement with Insurer. While laying down
these investigations, it is important to keep in mind that unnecessarily technology
intensive investigations should be avoided so that residents of backward areas are not
discriminated against. For example a CT scan or an ABG test is not available everywhere
and should be sparingly used. Annexures give lists of mandatory investigations in place
in health insurance schemes of three different states.
2. LAY DOWN ADJUDICATION GUIDELINES FOR CLAIM SETTLEMENT: All
insurance companies have such guidelines for claim settlement. Many such guidelines
have a great deal of medical content. To ensure that good quality health protocols are
built into these guidelines, these should form part of the tender and the agreement with
Insurer. For instance for orthopedic cases, these guidelines prescribe rates to be settled
where more than one long bone fracture is set at the same time. These guidelines also
indicate the settlement to be made where the length of stay was shorter than indicated.
There are multiple such examples where each Insurer and TPA has a separate policy for
settling claims for identical procedures. This in turn causes much complaint by hospitals.
ANNEXURE 6 places on record the claim settlement/ adjudication guidelines in place in
Maharashtra Insurance scheme.
3. CLAIMS APPEAL COMMITTEE SHOULD BE FORMED: The Insurer should be
asked to set up a Claims Appeal Committee with two representatives of State Nodal
Agency to entertain any appeals made by hospitals in respect of deductions and/or
rejections. A Turnaround Time should also be prescribed for deciding on appeals. The
Insurer should have final say in this matter. All hospitals need to be informed about the
committee so that if needed, they can prefer appeals.
6 Rathi, Prateek, Arnab Mukherji, Gita Sen, "Rashtriya Swasthya Bima Yojana, Evaluating Utilisation,
Roll-out and Perceptions in Amaravati District, Maharashtra", Economic and Political Weekly Vol XLVII
no 39, Sept 29, 2012, Mumbai.
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4. DRAFT AGREEMENT BETWEEN HOSPITALS AND INSURER WHICH IS
PART OF RFP SHOULD INCORPORATE KEY PERFORMANCE INDICES
FOR HOSPITALS FOR REPORTING: The agreement between Hospital and Insurer
which is part of the tender should contain a provision for regular reporting on Key
Performance Indicators to State Nodal agency and Insurer by empanelled hospital.
ANNEXURE 7 records the agreement between Hospital and Insurer recommended by
Maharashtra state.
5. KEY PERFORMANCE INDICATORS FOR HOSPITALS ARE ESSENTIAL:
ANNEXURE 8 records the data set collected on quarterly basis from all empanelled
hospitals by the RG Jeevandayee Society in Maharashtra. Such regular data collection is
essential for being able to establish benchmarks of hospital performance on quality
parameters. Such benchmarks enable assessment across time for the same facility and
also across space for comparing different facilities. The data set from Maharashtra for
instance collects reports on the number of admissions per month, the number of ventilator
days, number of patients who left against medical advice, number of deaths, number of
patients needing re-treatment for urinary stones, number of cancelled or postponed
surgeries, number of surgical site infections for clean operations, other adverse events to
give some example. This information would be very useful for medical audit. It is
important to note that the information must be submitted on all patients treated by the
hospital and not just RSBY patients. Any hospital would use substantial portions of its
infrastructure to service RSBY and accordingly it should be graded on the entire
infrastructure and reporting should be mandatory on outcomes for all patients.
6. REVISE HOSPITAL RATES FOR PACKAGES WHICH ARE TOO LOW AS
COMPARED TO COSTS: Low package rates is a common complaint by hospitals.
These rates were fixed way back five years ago and cost has risen considerably since
then. A committee should be appointed to work out costing of packages at current prices
to fix ceiling prices afresh. A good indicator for uneconomic packages would be
packages which are seldom used.
7. INITIATE MEDICAL AUDIT OF PRE-AUTHORISATIONS AND HOSPITALS
AND LAY DOWN STRICT SANCTIONS FOR DEVIATION: It is very important to
conduct random checks by way of medical audit by the State Nodal Agency. Andhra
Pradesh has done excellent work in this regard by initiating Medical audit of hospitals.
The Medical Audit form used in AP is placed at ANNEXURE 9. For medical audit, it
would be best to develop assessors from reputed medical colleges who are hired by the
State Health department for this activity. This is on the lines of the assessors on the rolls
of the NABH. A third party medical audit done by a private party may not achieve much.
Here we need to remember that only those doctors with sufficient standing in the medical
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community are capable of doing medical audit and it would be difficult for private parties
to hire such people. Routinely insurers and TPAs are not able to get reputed doctors to
carry out such tasks. This Medical Audit should be followed up with sanctions against
hospitals which deviate from the norms. Initially the hospital concerned could be barred
from performing the procedure abused but for those with many repeated offences, a
recommendation regarding suspension of license under the State Nursing Homes Act
could be made.
8. RE-DEFINE PACKAGES WHICH ARE MUCH ABUSED LIKE INDPENDENT
WARD STAY AND ICU STAY: It is suggested that General ward and ICU packages
should be linked with some existing packages and should not be allowed as Standalone
packages. In case a patient develops a complication in an existing package prolonging
length of stay indicated, only then should General Ward or ICU packages be allowed
through a fresh pre-authorization with evidence of the complication which occurred.
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7. ISSUE NO 3: RUNNING INFORMATION TECHNOLOGY
APPLICATION
a. NO UNIFORMITY ARCHITECTURE IN RSBY CURRENTLY: Currently
there is no unified web based IT architecture in place in RSBY. There are two types of IT
applications in RSBY: the various softwares dealing with issue of smart cards to
beneficiaries and a Transaction Management Software provided by GIZ. Regarding the
hospital transaction management software, there is no uniform IT application followed in
RSBY across the states. SNAs have no access to the Transaction Management Software
so it becomes difficult to track claim movements and settlements. This non transparency
results in piling up of complaints and grievances of network hospitals regarding claim
settlements.
It is therefore essential that a uniform IT application containing all the related modules for e.g.
preauthorization, claims, grievances etc. should be developed and managed by the Ministry of
Labour and Employment. Login rights should be given to SNAs, TPAs, Insurance Companies,
network hospitals etc. per the defined requirements.
Such an IT application does exist in Andhra Pradesh and Maharashtra. This web portal is a
workflow-oriented integrated system which addresses the needs of all the target groups
(Beneficiaries). Each phase of the patient’s journey through the system, from enrolment of the
beneficiary, in/out patient registration, surgery updates, preauthorization requests, discharge
updates, claim settlements etc. are routed through the IT platform. IT platform is designed for
monitoring real time information about the scheme such as patients (cases) registered, pre-
authorizations given, surgeries performed, amount claimed by the hospitals, claim amount paid
by Insurer, etc. Source code of this application could be made available to Government of India
if so desired.
This IT platform can be deployed at each state and it can be customizable as per the state specific
requirements with minimal code changes. A provision is made in the system to add or remove
procedures in the scheme. ICD coding is mandatory for all the procedures that are going to be
added in to the scheme.
Data Mining:
Data synchronization/replication is very important for the MoLE to monitor the RSBY scheme
progress at all the states. In order to monitor/administer the RSBY scheme centrally, IT platform
should have provision for data synchronization/replication so that all the states data (required
data formats can be identified later) will be kept at one place to do any kind of analysis. This can
be achieved by using interoperable techniques/Database replication techniques.
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Data Replication using Patient Data Replication Service:
MoLE (Central RSBY ) Application will enable integration of data /information from various
state RSBY applications so that one-stop source for all information and data pertaining to
various states can be provided to MoLE. For this purpose, patient data (RSBY cases) from
various state portals need to be consolidated on a regular basis. This consolidated data will
enable MoLE to monitor the scheme centrally.
Approach for integrating Patient Data Replication (PDR) service with RSBY
PDR service (Client) would be an integral part of State RSBY application. It is a must for
consolidation of patient data from all the state RSBY portals with Central RSBY application.
This can be implemented using well defined Web Service Description Language(WSDL)
compliant standard interface. It provides the data of all registered patients and the data pertaining
at each stage in the workflow in the given time period.
This service can provide the following functionalities.
1. New patient registration
2. Patient Lifecycle updates – such as Preauthorization, Surgery update, Claim Processing,
electronic health records.
3. Patient Discharge, etc.
PDR Service (server) would be an integral part of center RSBY application and it is a scheduled
job type of entity. It would communicate with PDR service (client) using well defined standard
interface. Using this, data can be retrieved from the state RSBY applications and kept in central
database of central RSBY application.
b. USES OF IT ARCHITECTURE
In this way the IT application in RSBY could be a powerful source of information for:
CLINICAL DATA ON EPIDEMIOLOGY AND TREATMENT PROTOCOLS
One of the reasons for the fact that there is little discussion on treatment outcomes in
RSBY is that clinical data is captured in a very limited way. The applications can give
demographic details of the patients treated and the procedure performed. But other
clinical details whether medication prescribed, ICD disease code, basic symptoms are not
being captured. Even information about medication and disease codes in themselves
would provide a great deal of data about epidemiology. If clinical pathways are
introduced, a great deal of data about treatment protocols would be generated. RG
Jeevandayee Society has appointed a software vendor for automating the protocols for
ease of use.
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MONITORING ON DEVIATIONS
Fraud is a common problem in RSBY. A report by Amicus Advisory on fraud in RSBY
listed following common frauds:
INVENTORY OF THE ACTS OF INDISCRETIONS
_________________________________________________
Analysis reveals that some of the most common acts of indiscretion are as under.
1. Fraudulent admissions
2. Conversion of Outpatient cases to Inpatient cases
3. High incidence of day-care procedures
4. Deliberate blocking of higher-priced packages to claim higher amounts
5. Blocking of multiple packages even though not required
6. Connivance with beneficiaries to swipe the cards even without any need for treatment
7. Non-payment of transportation charges
8. Not dispensing post-hospitalization medication
9. Showing medical management cases as non-invasive surgeries
10. Impersonation in connivance with cardholder and hospitals
11. Replacing fingerprints fraudulently at district kiosk
12. Addition of outsiders as family members and inclusion of biometrics
13. Irregular or inordinately delayed synching of transactions to avoid investigations
14. Treatment of diseases which a hospital is not equipped for
15. Showing admission in ICU though treatment is given in general/private wards
A uniform IT application could be of great use in identifying deviations and taking remedial
action.
c. RECOMMENDATIONS ON IT APPLICATION
1. MINISTRY OF LABOUR CAN USE SOURCE CODE OF MAHARASHTRA/AP
APPLICATIONS: It is understood that the Ministry is already planning to have a
separate agency to develop the IT application for greater functionality. Here the source
code of software as available in Maharashtra and Andhra Pradesh could be used as a
basis since this software already have provisions for pre-authorizations and also for
hospital claim settlement. This code could then be customized to suit RSBY.
2. AGENCY FOR MAINTAINING SOFTWARE SHOULD BE DIFFERENT FROM
INSURER: Once developed, this software should not be handed over for maintenance to
the Insurer; rather the agency which develops the software should be hired to maintain
and customize it further for a period of three years at least. Separate service level
agreements could be signed between Insurers and the IT agency to facilitate data flow to
the Insurer. The reasons are:
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a) DIFFERENCE IN PERSPECTIVE OF INSURER AND SNA: All complex software
require a great deal of change management and customization. Here there is a basic
conflict of interest. The Insurer is certainly interested in monitoring financial information
to flag cases of fraud. But an Insurer can have no interest in the first objective of the
Ministry: namely to get epidemiological data. Capturing clinical data for this purpose
requires exhaustive interaction with the users which has a cost. Insurers are rarely willing
to bear these costs, nor is it in their interest to do so. Even simple activities like linking a
procedure with the mandatory investigations and checklists of documents prescribed, has
a cost to it.
b) GIVING PRIVATE INSURERS CONTROL OVER HEALTH DATA IS
PROBLEMATIC Giving control over the IT application to the Insurer would provide
private players access to the health profile of the population. That in itself is dangerous.
In other countries for instance South Africa where the IT application is run by the
Insurers, merely getting medical data for the government is not an easy task.
3. DATA MINING SOFTWARE NEEDED: Given the vast volume of data anticipated, the
Ministry should invest in appropriate data mining software for retrieving data for health policy as
per requirement. This data should be shared with State Nodal Agencies for appropriate action.
For example, huge medical data is available with the Arogyasri Trust in Andhra Pradesh so the
Trust has incorporated a Business Intelligence tool for improved reporting, trend analysis, future
projections etc. Further the invaluable data is used to study the disease trends, prevalence and
distribution among various demographic groups to plan the scheme and suggest preventive
health measures in AP.
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8. POLICY LEVEL ISSUES
9. ISSUE NO 4: INTERFACE WITH INSURERS
The issues discussed so far have mostly to do with implementation but we have seen that many
problems also arise due to poor accountability of hospitals and insurers. The main grievance of
state governments has been that the Insurers are not sufficiently accountable in the various tasks
they are supposed to perform in RSBY. In this section we shall discuss the issues which arise due
to errors inherent in the policy paradigm in the scheme.
The basic issues in the interface with the Insurer have been:
1. Poor enrolment ratios for beneficiary families and low beneficiary awareness in many
areas.
2. Skewed uptake in many regions: low uptake in some areas enables substantial profits for
Insurers while fraud in other areas leads to excessive claim ratios.
3. Empanelled hospitals not equitably distributed across the region often due to
concentration of hospitals in and around district headquarters and metropolises.
4. Hospitals which perform well are often de-empanelled at short notice and with little
reason.
5. Medical audits are hardly conducted.
6. Information not regularly collected on Key Performance Indicators for Insurers
These issues arise mainly on account of following issues:
a. INSURANCE COMPANIES ARE NOT DESGINED FOR THE JOB OF
OUTREACH
Insurance companies which sell policies in the private health insurance market are not designed
to conduct outreach programs for poor and deprived beneficiaries. Private buyers are well aware
of the benefits they have paid for. For group insurance policies, it is the responsibility of the
company/corporation/Society to provide verified database of those eligible. In most such
policies, there are routinely co-payments involved so each person covered, automatically knows
the health benefits due to him. It is certainly not expected that any insurance company would
make any effort to inform those covered of the benefits available. It is only with the RSBY that
insurance companies were asked to make this effort. The RSBY provides coverage to the poorest
and most vulnerable sections of society many of whom may not be literate. Insurance companies
have little or no experience of dealing with such groups. Asking them to deliver such services
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has been counter-productive. A specific effort needs to be made to reach the deprived which
Insurance companies do not make.
b. CONFLICT OF INTEREST OVER PUBLICITY AND ENROLMENT
Secondly there is a major conflict of interest here. While it is true that higher enrolment would
mean higher premium, too much publicity would lead to higher incidence ratios which is against
the interest of the Insurer. This is why post enrolment publicity is vested with State Nodal
Agency but they have little funds for this task.
Similarly empanelment of hospitals which take their tasks seriously and perform well also lead to
higher payouts. De-empanelment of a hospital then cannot be so easy or at least it should not be
entirely at the option of the Insurer.
c. LIMITED AVENUES FOR FEEDBACK TO GOVT EXIST
In the present RSBY structure, since the call center is run by the Insurer, very limited avenues
for feedback are available to the State Nodal Agency or to the Ministry of Labour. In many states
which run call centers, the average daily volume of calls is around 5000 and much information is
exchanged by this means. For smooth running of the scheme, this function should be taken over
by SNA.
d. INSURANCE COMPANY HAS NO INTEREST IN EQUITABLE
DISTRIBUTION OF SERVICES
Equitable distribution of facilities is a factor which is far more the concern of the State Nodal
Agency than the Insurer. For insurers it hardly matters whether their payout comes from a few
hospitals or from many hospitals or whether it comes from the metropolises or backward areas.
This is something which does concern the State Nodal Agency which has little control over the
decision. Nor are desirable ratios of beds to population spelt out in the RSBY. Since the State
Nodal Agency is not sufficiently involved in these decisions, long term plans to address basic
infrastructure gaps are rarely drawn up.
e. DIFFERENCE IN PERSPECTIVE OVER IT APPLICATION
From the perspective of the Insurer, the purpose of the IT application is merely to monitor the
financial details of the pre-authorizations and claims and at best, to detect fraud. To add coding
to capture details of medical data involves a considerable cost which is not economic from the
point of view of Insurer. Given the complexity of the software, it would be very difficult to
anticipate all the future requirements and build these into the Functional Requirement
Specification. Moreover, while many clinical pathways exist, many are yet to be developed.
Unless the IT contract is separately drawn up and monitored by the State Nodal Agency, it would
be difficult to adjust the scheme to cover such requirements. In Maharashtra, the contracts which
the Insurer entered into with the IT service provider ran counter to the contracts which the
Insurer had signed with the State Nodal Agency.
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f. LOW LEGITIMACY FOR MEDICAL AUDIT
Finally the ability to do medical audit depends entirely on the legitimacy of the person
conducting the audit. This is something which doctors employed by Insurers rarely have. The
same problem would be faced by any Third party which attempted the task. Medical audit can
best be conducted by doctors employed in reputed medical colleges or hospitals of the highest
grade. Such doctors are available mostly to the government and some selected private institutes.
Similarly the task of drawing up clinical pathways and lists of mandatory investigations must be
coordinated by the State Nodal Agency using the services of doctors from such reputed
institutions. Yet it is the Insurers who in RSBY have prescribed the lists of mandatory
investigations and even on occasion, empanelment criteria.
g. INSURERS CANNOT BE EXPECTED TO REGULATE THEMSELVES
All these issues arise because of a basic anomaly in the structure of RSBY: given that the Insurer
has been contracted in to perform a certain set of tasks, it must be the job of the State Nodal
Agency to monitor task performance. But the RSBY creates a structure in which monitoring
tasks like medical audit or grading of hospitals or collecting key performance indices from
hospitals and Insurers has been entrusted to the Insurer itself. This is a contradiction in terms. No
agency is equipped to regulate itself, nor should we ask it to do so. This must be the job of the
State Nodal Agency. The expected outcomes and agenda must be set by the government and the
State Nodal Agencies equipped with the authority and tools to monitor how that agenda could be
achieved. A PPP model cannot mean outsourcing the scheme lock, stock and barrel: that would
defeat the purpose of the PPP. Something like this is what has happened to the RSBY.
The current allocation of tasks in RSBY does not reflect the core competence of the two main
agencies involved, namely the Insurer and the State Nodal Agency. The present structure also
prevents the SNA from carrying out its role of supervisor adequately. For greater efficiency and
transparency in service delivery, the core competence of the agencies should be taken into
account.
h. CORE COMPETENCE OF INSURANCE COMPANIES The core competence
of an Insurance company in the field of Health Insurance lies in three main tasks:
1. Empanelment of Hospitals including fixing rates for procedures offered.
2. Processing Pre authorizations for Elective procedures
3. Processing Claims of Service Providers and claim settlement.
Insurers would be competent for these three tasks. However regarding empanelment of hospitals,
it is best that this should be a joint task with the State Nodal Agency. Currently empanelment is
the primary responsibility of the Insurer although the State Nodal Agency can intervene where it
deems fit. As has been pointed out above, it is the State Nodal Agency and not the Insurer who is
interested that the hospitals be equitably distributed. Clear criteria need to be provided to the
Insurer for empanelment. Also the number of hospitals in terms of ratio of bed to population
should be fixed to provide some basis for decision-making. Criteria for pre authorization and
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claim settlement should also be included in the tender and also Agreement with Insurer to ensure
good service and transparency.
For these three tasks, Insurer does have a great deal of expertise which it may be difficult for
government agencies to replicate.
i. WHY STATE NODAL AGENCIES FIND IT DIFFICULT TO PERFORM
THE FUNCTIONS OF INSURER
1. ABILITY OF GOVT TO CONTAIN COSTS VERY POOR: The ability of the
government to keep tabs on market rates and to negotiate discounts is severely limited.
Current government procedures make any discounting of prices very difficult. The
Arogyasri scheme in Andhra Pradesh started out with differential pricing for hospitals
and soon after it changed to a Self-Insured Model, discounting was given up. In
government hands, the likelihood is that prices of procedures would soon balloon and
costs would simply remain in an upward spiral. In the Maharashtra case, the old
Jeevandayee scheme processed 96000 cases at an average rate of Rs 66000 per case for
fourteen years. In the new Jeevandayee Yojana in the Insurance based model, the cost per
transaction came down to Rs 25000 per case and the number of beneficiaries
automatically tripled.
2. ABILITY OF GOVT TO MANAGE A VARYING WORKLOAD VERY POOR:
Processing Pre Authorization and Claims is a manpower intensive task with the numbers
of staff constantly varying. Given the legal hassles which all government organizations
routinely face in the Labour Courts, it would be very difficult for the government to
manage these aspects of the scheme. In Tamil Nadu and Maharashtra, the Insurer
employs Liaison officers at every hospital, including government hospitals. Tamil Nadu
insists on regular rotation of these employees. They not only facilitate patient treatment,
liaison with head office but also act as informers. In Andhra Pradesh, these Arogya
Mitras are employed by the Aarogyasri Trust itself and their number runs into thousands.
For government however, direct employment of Arogya Mitras could have serious long
term consequences. Eventually the Arogya Mitras and the staff of the scheme would put
in claims demanding permanent employment. Within six months of the scheme being
launched in Maharashtra, the Arogya Mitras went on strike and only after it was made
clear to them that the principal employer was the Insurer/TPA, was the strike called off.
3. ABILITY OF GOVERNMENT AGENCIES TO RESIST POLITICAL
PRESSURES IS LIMITED: In India, the present political system functions on the basis
of building patron client relationships. This system in turn means that there is a great deal
of pressure on politicians from their constituents to ask for undue favours from
government agencies. And hospitals are rather powerful entities. The ability of
government agencies to implement empanelment norms impartially, to have an objective
vetting of pre authorizations, remains suspect therefore. Insurers on the other hand, are
far less vulnerable to such pressures.
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These features make insurance companies well equipped to take care of the three tasks of
empanelment, pre authorization and claim processing.
Now let us look at the core competence of the State Nodal Agencies.
j. CORE COMPETENCE OF STATE NODAL AGENCY
STATE NODAL AGENCIES HAVE LONG EXPERIENCE IN OUTREACH AND
PUBLICITY: It has been the basic task of State governments to reach out to the public and most
especially to the deprived sections of the population for the last fifty years at least. While there
may have been some slip ups in the task, in the end it is government agencies which conduct the
decennial census and which have built up a database of voters for the electoral machinery with
some success. No doubt the databases of the government still need a great deal of correction. But
that is the job of government and it cannot be outsourced. Hence the State Nodal Agency should
be entrusted with the task of issuing the beneficiary cards. Given the importance of this activity,
permanent kiosks could be opened for this task in the Rural Hospital in each block. The specific
agencies to deliver the cards and configure each card could be empanelled by Central
Government and state governments could choose any agency in the panel. It would be open to
the government to pick up and empanel any competent state level public sector undertakings also
for the job. Here however a note of caution is needed: the State Nodal Agencies/ concerned
departments should create some paper trail involving verification by the beneficiary to validate
the databases. Too often these databases are not confirmed with the beneficiary himself. Merely
reading out names in a panchayat or displaying these in a ward is not sufficient to validate the
databases and all caution should be taken on this account.
STATE NODAL AGENCY WELL EQUIPPED TO RUN CALL CENTER AND
PUBLICITY: Most state governments already perform the task of running a call center in the
102 service under Janani Suraksha Yojana or 108 ambulance services. So government is well up
to this task. The call center is a very important source of feedback to the State Nodal Agency
regarding grievances by hospitals and/or patients. Without this feedback, the ability of the State
Nodal Agency to monitor the scheme becomes very limited. There are many grievances that calls
are not adequately answered. All three states of Andhra Pradesh, Maharashtra and Tamil Nadu
run 24*7 call centers; in AP it is done by the Aarogyasri Trust and it is run by Insurers in the
other two states. Tamil Nadu supervises call center employees while the employees are paid by
the Insurer. Tamil Nadu seems satisfied with the Call center but the Maharashtra government
found that the information provided by the Call center staff was of varying quality ranging from
good to outright bad. The Maharashtra Rajiv Gandhi Jeevandayee Arogya Yojana Society then
had to set up its own call center for hospitals.
GOVERNMENT HAS PERSPECTIVE NEEDED FOR RUNNING IT APPLICATION
The IT application is of great importance both for (1) running the scheme on a daily basis and
(2) Mining the application for health related data.
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While the data gathered in RSBY has significant value, only the Health Department officials can
know what the appropriate questions to ask the database are. What combination of demographic
details with a particular disease pattern raises alarms is a question requiring much domain
expertise. Insurance companies do not have this expertise. We should associate with reputed
research institutes for data mining from the beginning; otherwise it may lose its focus in view of
routine administrative works. The government should actively reach out to agencies like Indian
Council of Medical Research and Medical colleges so that the data could be used for research
purposes.
For all these tasks, it is important to build in fields for medical data in the various forms to be
filled in by the hospitals and practitioners. Simple items like medication prescribed and ICD
codes for disease and procedure, when added to demographic data, can bring in a great deal of
information. This information could be used to identify any anomalies in procedures in the field
and used for corrective action. Hence data mining is best possible when the state government is
running the IT application. The Call center could be clubbed with the IT Application while
floating a tender. Service level agreements could be drawn up between the IT vendor and
Insurer. But it would be important for the SNA to directly monitor the execution of contract for
the IT application.
STATE NODAL AGENCY HAS ACCESS TO REPUTED DOCTORS FOR CONDUCT
OF MEDICAL AUDIT: Conducting medical audit is an important tool to monitor the health
outcomes of the scheme. The quality of treatment offered and follow up can be reviewed through
audit. This task can be done by Insurers only if they have well qualified manpower. Trained
doctors are not easily available to Insurers for this purpose. More importantly, in order to
maintain checks and balances, it is best to have Insurers vet the pre-authorizations and claims
and to have the State Nodal Agency conduct random checks both of pre-authorizations and of
empanelled hospitals. The State Nodal Agency is much better equipped to conduct medical audit.
The Public Health Department alone has the legitimacy required to hire doctors from reputed
public and private hospitals and colleges. Finally it is the Health department alone which has an
interest in and ability to monitor health outcomes.
PUBLIC HEALTH DEPTT HAS LONG EXPERIENCE IN WORKING WITH
HOSPITALS AND DOCTORS: The Public Health Department has considerable experience in
working with hospitals and individual doctors. It is the State Nodal agency which should identify
infrastructure gaps which exist and which should draw up a long term plan to address those gaps.
Otherwise the RSBY would simply replicate the existing medical infrastructure which in turn
would mean that funds would flow far more to the developed areas rather than to existing areas.
Both Andhra Pradesh and Maharashtra made systematic efforts to upgrade infrastructure across
the board. Maharashtra set up dialysis units in public hospitals across the state since these
facilities were hardly available in the private sector. These are tasks which are of no interest to
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the Insurer. Only the active involvement in the empanelment process can help achieve equitable
distribution in the long term.
k. THE ADVANTAGES AND DISADVANTAGES OF INSURED AND SELF
INSURED MODELS
THE INSURER MODEL
ADVANTAGES DISADVANTAGES
1. Good ability to contain Costs Administrative Costs of Insurer and TPA
added on.
2. Good ability to discount package rates Tendency of TPAs to collude with
hospitals to perpetuate fraud
3. Good ability to manage manpower
without legal hassles
4. Capable of handling political pressures
THE SELF INSURED MODEL
ADVANTAGES DISADVANTAGES
1. Lower Administrative Costs 1. Poor Ability to control costs
2. No TPA collusion with hospitals but
we cannot discount possibility of Trust
employees colluding with hospitals
3. Poor ability to discount package rates
4. Poor ability to manage manpower
5. Vulnerable to political pressures
l. RECOMMENDATIONS ON ROLES OF SERVICE PROVIDERS
ALLOCATE FINANCIAL FUNCTIONS TO INSURER AND RESIDUARY FUNCTIONS
TO STATE NODAL AGENCIES: In the light of above discussion, we can say that
outsourcing the entire scheme to a single vendor would defeat the purposes of the scheme. The
RSBY has some financial functions. The financial functions should rest with the Insurer but
tasks like issuing of identity cards, and overall monitoring must rest with the Labour and Public
Health Departments so that the health outcomes of the scheme could be monitored. For IT
Application and call center, a separate vendor should be appointed to avoid conflict of interest.
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FINANCIAL FUNCTIONS WITH INSURER:
1. Processing Pre authorizations for Elective procedures
2. Processing Claims of Service Providers and claim settlement.
For performing all these functions too, the government should provide detailed medical
parameters for rationalizing decision taking in each of the above cases including clinical
pathways and mandatory investigations for pre-authorizations and checklist of documents for
claim processing.
For processing rejected pre-authorizations more objectively, a committee consisting of two
doctors from Insurer side and two doctors from SNA side could be constituted. In addition, a
doctor from a public hospital mutually agreed upon by both parties, could be a fifth member. The
committee would need to meet daily. Similarly a committee to process appeals on claims
reduced or rejected could be constituted. Both committees should be headed by Insurer.
SUPERVISION AND RESIDUARY FUNCTIONS WITH SNA:
1. Issuing Smart Cards for Identification
2. Conducting Publicity
3. Conducting Medical Audits both of pre authorization and of hospitals and practitioners.
JOINT FUNCTIONS OF INSURER AND SNA:
1. Empanelment of Hospitals.
2. Empanelment of private practitioners for OPD services where the doctors in government
or NGO sector are insufficient.
For empanelment function, a committee should be set up with two representatives of Insurer
and two representatives of SNA and one representative of Public Health Deptt in case the
SNA is the Labour Deptt and vice versa. The chairperson of the Empanelment Committee
should be the head of the SNA.
SEPARATE VENDOR BE HIRED FOR IT AND CALL CENTER
1. Running the Call Center
2. Running the IT Application
This tender should be separately floated by SNA and appropriate service level agreements be
contracted with Insurer to facilitate scheme operations. A detailed Functional requirement
specification would be needed for the tender.
STRENGTHEN THE STATE NODAL AGENCIES: If the State Nodal Agencies are to
perform all these tasks, it would be important to strengthen these agencies. Ideally each SNA
should be registered as an independent society or Trust but this is a decision which should be left
Final Draft Report
44
to the state governments. The Centre also needs to increase some resources for SNAs.
Alternatively, the staff augmentation of the SNA can be done through the model followed by The
Planning Commission of India, for hiring of consultants. The current allocation of Rs 30 per
family is too low and this should be raised to Rs 50 per family insured. In any case these costs
should not be loaded onto the premium. The SNA should also be provided adequate and regular
training on the key processes of RSBY and the IT platform by National Labour Institute (NLI) to
enable it to function effectively.
STRENGHTHEN OPERATIONS TEAM AT MOLE: In the earlier schema of operations,
MoLE lacked the manpower to address key field issues reported to them. This was primarily
done by an outsourced agency at MoLE, leaving the scheme vulnerable to multiple unresolved
issues. It is hence recommended that an institutional structure be created at MoLE to support the
program at a national level. Adequate manpower at various levels technical and operational
should be available at MoLE to address technical and policy level issues.
KEY PERFORMANCE INDICATORS FOR INSURERS: This is an important set of
indicators which could be used to assess performance of Insurers every month. The following
indicators are used in Maharashtra to get performance of every district in the state every week:
Indicators Definition
Whether for
that month or
cumulative
since
beginning of
financial year
1 Incurred Claim Ratio On Earned Premium Cumulative
On Total Premium Cumulative
2 Booked preauth ratio Amount of Preauth booked /Premium
paid for district Cumulative
3 Incidence Rate
No of preauths raised from Network
Hospitals/ No of beneficiary families
in that district covered in policy
Cumulative
4 Average payout per claim Total value of claims paid in Rs/ No of
claims Cumulative
5 Average payout per
beneficiary
Total value of claims paid in Rs/ No of
patients treated
6 Total no of hospitals
empanelled WITHIN the
Total hospitals empanelled
cumulatively Cumulative
Final Draft Report
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Indicators Definition
Whether for
that month or
cumulative
since
beginning of
financial year
district
7 Total no of public hospitals
empanelled WITHIN the
district
Total hospitals empanelled
cumulatively Cumulative
8 No of Preauthorisations
Raised No of pre auth raised Cumulative
9 No of pre authorisations
approved No of pre auth approved Cumulative
10 % Preauth Approval No of preauths approved X 100/ No of
preauths raised by concern district Cumulative
11 No of pre authorisations
rejected No of pre auth rejected Cumulative
12 % Preauth Rejected No of preauths rejected X 100/ No of
preauths raised by concern district Cumulative
13 No. of procedures done Cumulative
14 Surgeries/Therapies / 1
Lac Beneficiaries
Surgeries/Therapies / 1 Lac
Beneficiaries Families Cumulative
15 No of claims paid No of claims paid Cumulative
16 No of claims pending
beyond 15 days
No of claims pending beyond 15 days
of receipt Cumulative
17 No of claims rejected No of claims rejected Cumulative
18 Claim rejection rate No of claims rejected X 100 / No of
claims raised by concern district Cumulative
19 No of camps held
Cumulative
20 No. Of patients screened in
health camps. Cumulative
21 Average No patients
screened / health camp
No of patients screened / No of health
camps Cumulative
22 No. Of patients referred in
health camp Cumulative
23
No. Of patients of health
camps reported to Network
hospital
Cumulative
24
No. Of preauths raised at
Network hoospital for camp
patients
Cumulative
Final Draft Report
46
Indicators Definition
Whether for
that month or
cumulative
since
beginning of
financial year
25
District wise Uptake of
follow up procedures as %
of discharged cases eligible
for follow up
No availing first follow up for follow
up Procedures X 100/ No eligible for
follow up (No preauths approved
eligible for follow up packages- No of
deaths- Numbers where sum
exhausted)
Cumulative
26
District-wise % of approved
Preauths in total preauths
and in public hospitals
No of approved preauths in public
hospitals X 100 / total no of approved
preauths in that district
Cumulative
27 Payout to public hospital
v/s Total Payout in district.
Claim amount paid to public hospitals
X 100/total claim amount paid to
districts
Cumulative
28
District-wise no. of 131
Government procedure
performed.
No of procedures reserved for govt
performed by Public Network
Hospitals
Cumulative
29
District-wise uptake of
Government procedures
against No of beneficiary
families
No of preauths raised from Public
Network Hospitals for govt reserved
procedures X 100 / No of beneficiary
families in that district covered in
policy
Cumulative
30 No. Of grievances pending
more than 7 days. Cumulative
Monthly indicators
1 No of hospitals empanelled
in the week
2 No. Of hospital raise less
than 7pre auth in a week
(should be de-empanelled)
No of hospitals raising less than 7 pre
auth
3 No of pre authorisation
raised in the month No of Preauth Raised
4 No of pre authorisations
approved in the month No of Preauth Approved
5 % Preauth Approval No of preauths approved X 100/ No of
preauths raised
6
District-wise No. Of pre-
auths approved beyond 12
hours of TAT.
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Indicators Definition
Whether for
that month or
cumulative
since
beginning of
financial year
7
% Preauths approved
beyond 12 hours to total #
preauths raised
No Preauths approved beyond 12
hours X 100/ total No preauths raised
8 No. of procedures done
9 District-wise No. Of
claims pending beyond 15
days.
No of claims pending beyond 15 days
of receipt for that month
10
% Claims pending beyond
15 days to total claims
submitted
No of claims pending beyond 15 days
X 100/ total No claims submitted
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48
10. ISSUE NO 5: INCENTIVE STRUCTURES FOR STAKEHOLDERS
An effective means of improving service delivery of various RSBY agencies would be to align
the financial incentives of these agencies with the deliverables expected of these agencies.
Currently these incentives are not necessarily aligned with the deliverables. In this section, the
incentive structure of each agency: hospital, Insurer and TPA would be independently discussed.
a. INCENTIVE STRUCTURE FOR HOSPITALS
The process of Empanelment of Hospitals would normally have following objectives:
1. To identify hospitals with the requisite facilities to provide patient care
2. To empanel sufficient number of facilities to see that there is no denial of care to patients
and to see that these are regionally distributed
3. To provide concrete incentives to improve quality of care.
For achieving the first objective, RSBY and most state governments look at the availability of
human resources and infrastructure in the hospitals. If RSBY could proceed further and add
process parameters to HR and infrastructure, it would represent a significant advance in the
quality of assessment of hospitals. All medical facilities must perform some basic patient care
processes like issuing patient identifiers, record keeping, infection control protocols and other
Standard Operating Protocols. These should be part and parcel of a comprehensive assessment.
Any gaps in process parameters have serious consequences at ground level and can lead to a
doubtful quality of service. The report of Amicus Advisory on RSBY identifies following
commonly observed deviations in hospital practice:
TABLE 1: SOURCE (AMICUS ADVISORY REPORT)
Discrepancy Type Count % Occurrence
Qualified nurse not
present
774 37
Investigation Report/
Corroborating Diagnosis
not available
286 14
OT notes not available 285 14
Qualified Doctor not
present
272 13
Didn't co-operate with the
Investigation Team
144 7
Indoor case papers
incomplete
99 5
Proof of payment of 91 4
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Discrepancy Type Count % Occurrence
Transportation Charges
absent
RSBY Help Desk not
available
79 4
Patient's complaint
doesn't corroborate with
package blocked
63 3
Treating doctor's details
not shared
44 2
Daily monitoring chart
not available
28 1
Discharge Card not
prepared
19 1
Package blocked without
patient being admitted
18 1
Complaints & treatment
doesn't justify
hospitalization
14 1
Vital equipment missing
from OT
12 1
Discrepancy between
patient's & Smart Card's
details
10 -
Food not provided to
patient
6 -
b. GRADING SYSTEM RECOMMENDED
One good way to deal with such problems may be to have comprehensive quality of care
parameters for hospital assessment
Tamil Nadu has gone a little further on these lines and has added some norms like use of ICD
coding etc. But Maharashtra has the only scheme which to our knowledge, has built in
comprehensive norms for monitoring quality of care or process parameters.
Maharashtra has developed a grading sheet for hospitals which has the following sections (the
grading is done for all hospitals, whether private or public):
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TABLE 2: SUMMARY OF EVALUATION PARAMETERS USED IN MAHRASHTRA
Sr No Name of parameter Number of
Indicators
Marks
1 HR Quality 10 18
2 Facilities Management 15 15
3 Infection Control Measures 11 12
4 Quality of Patient Care 17 20
5 Monitoring Medication 6 8
6 Maintenance of Patient Medical Records 5 7
7 Patient Satisfaction Indices 8 8
8 Standard Operating Protocols 8 5
9 Transparency In pricing 4 7
Total Weightages 84 100
Detailed Grading sheet used in Maharashtra is placed at ANNEXURE 10A. The grading sheets
used in Tamil Nadu for multi-specialty and single specialty hospitals is placed at ANNEXURE
10B.
c. NORMS FOR SINGLE SPECIALTY HOSPITALS
In addition to the above norms which are useful for empanelling multi-specialty hospitals which
provide intensive care, a different set of norms is needed for empanelling single specialty
hospitals so as to provide services closer at hand to people living in remote areas. Both
Maharashtra and Tamil Nadu use a different grade sheet for single specialty hospitals in a few
specialties: Pediatrics Medical Management, Orthopedics, Nephrology for standalone dialysis
centers, Ophthalmology, ENT, Oncology and Prostheses. The grade sheet used in Maharashtra
is placed at ANNEXURE 11A.
d. ISSUES WITH NABH NORMS
The National Board of Accreditation for Hospitals and Healthcare Providers (NABH) has norms
for different levels of healthcare providers which are in line with International norms. Many
states do incentivize hospitals that comply with NABH norms by providing an added percentage
reimbursement in the package available. The major issue remains that the numbers of these
facilities are very limited and do not constitute more than 10% of the hospitals empanelled.
Using such a strategy means that there is no uniform evaluation of the remaining 90% hospitals.
There would be no performance incentive for facilities which may comply only partially with the
NABH norms.
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51
It has been generally observed that the NABH norms emphasize space requirements a lot and
have very strict labour policies which drive up costs. These norms focus on processes and not on
treatment outcomes which are very important to RSBY. Moreover these norms are very general
and difficult to apply for a large scale exercise. The NABH norms have not been used to empanel
hospitals on a large scale so the utility of their tools remains untested. The Maharashtra
government has already been using the above norms successfully for a year now and has
successfully empanelled 500 hospitals in the state alone.
e. RECOMMENDATIONS ON HOSPITAL INCENTIVES
1. USE OF COMPREHENSIVE GRADE SHEET APPLICABLE TO ALL
HOSPITALS EMPANELLED: The grade sheets used in Maharashtra for multi-
specialty and single specialty hospitals could be adopted in RSBY.
2. INFRASTRUCTURE AUDIT FOR SPECIALTY EMPANELMENT: While the
above grading sheet can be used to grade a hospital, a separate assessment is needed to
determine which specialties can be empanelled in any hospital. The Infrastructure
Audit Form being used in Maharashtra for this purpose is placed at ANNEXURE 12A.
The forms used in Andhra Pradesh and Tamil Nadu are placed at ANNEXURE 12B
AND 12C respectively. This form should take into account the human resources
available in areas outside the metropolises. We should not mandate super specialty
qualifications for areas like Nephrology, Pulmonology, Gastroenterology etc. since these
are not available in sufficient numbers. Persons qualified as MD Medicine and MS
General Surgery with some experience are also well qualified to perform many
procedures. But this needs to be clearly specified in the Infrastructure Audit form
otherwise Insurers routinely use personnel norms which are more suitable for large
metropolises only. Having broad based personnel requirements would allow the scheme
to empanel hospitals in remote areas also.
3. LINKING GRADE WITH PACKAGE RATE: Costs of providing services vary
greatly depending on the location of the facility and type of service provided. To have the
same payment rate for all would create a situation where quality would have little
meaning and costs would soon spiral. We cannot say that an Apollo hospital and a 10 or
20 bed operation have similar costs. The above grade sheet as used in Maharashtra can be
used to grade hospitals in 4 different grades and each grade could be paid a different
package rate. For single specialty hospitals, there are 2 different grades in operation. This
would provide hospitals with financial incentives to improve quality. The grading system
recommended by Maharashtra is as follows:
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GRADING SUMMARY FOR MULTI SPECIALTY HOSPITALS
Criteria Grade Package
Rate
Minimum mandatory fulfilled in all sheets and
marks more than 50% in each sheet
A 100%
Marks more than 50% in 6 sheets i.e.
HR,FAC,MED,EMR,ICM,TIP
B 85%
Marks more than 50% in 4 sheets i.e.
HR,FAC,MED,TIP
C 75%
Marks more than 50% in 2 sheets i.e. HR,FAC D 60%
In practice however Maharashtra found that there were very few hospitals in the D grade and it
only served to identify hospitals at the bottom of the list. Perhaps the states with poorer
infrastructure availability might still need the D grade in case they are not able to empanel
sufficient hospitals in the top three grades. Tamil Nadu uses a grade sheet with six different
grades.
4. NEED FOR CAPABILITY BUILDING: This system of empanelment would need to be
coupled with a training program for staff of empanelled hospitals on the said norms. A
commonly reported problem in hospital services is lack of awareness of safety protocols and also
lack of documentation. One such study from Patan Gujarat said that, "The hospitals are not used
to and often do not maintain detailed documentation of all processes. When insurance companies
raise questions about these claims, doctors feel hassled and do not realize that thorough
documentation and knowledge about what is included in the package and what is not, can
actually minimize these rejections"7. In Maharashtra, the RG Jeevandayee Arogya Yojana
Society tied up with the National Board of Hospitals and Healthcare providers to train hospital
staff including staff of private hospitals. A three day course was devised for this purpose. Till
date over 500 persons from the state have been trained in the course. Free slots are offered in this
course to all empanelled hospitals, whether public or private ones. The costs are borne by the
Society.
5. SETTING UP AN INDEPENDENT GRADING MECHANISM: Ideally there should be an
independent mechanism for grading and evaluation of hospitals. This is because such kinds of
7 Seshadri T, Trivedi M , Saxena D, Nair R, Soors W, Criel B, Devadasan N, "Study of Rashtriya
Swasthya Bima Yojana (RSBY) Health Insurance in India", Institute of Public Health, Bangalore, India,
Indian Institute of Public Health, Gandhinagar, India, Institute of Tropical Medicine, Antwerp, Belgium,
2011. URL accessed on 7th Sept 2013. http://www.iphindia.org/v2/wp-content/uploads/2013/01/RSBY-
report_2013_Jan_02.pdf
Final Draft Report
53
evaluations require expertise which can be built up over time and it needs continuous capability
building. Moreover, even the Public Health Department runs government hospitals and there
would be a conflict of interest in the Department evaluating its own hospitals. But this choice
could be left to the states. In any case even if the Health Department were to take up the task,
they would need to have an independent program to develop assessors and to provide the
assessors recognition of some kind to build up a culture of medical audit.
6. SANCTIONS FOR DEVIATION: Punishments for hospitals can be at different grades like
stopping only pre authorization, withholding all the pending claims, suspension, removal,
imposing penalty, down grading etc. For those who consistently violate the rules, cancellation of
license under State Nursing Homes Act be considered.
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f. INCENTIVE STRUCUTRES FOR INSURERS
There is a common misnomer that RSBY is a health insurance program. However, since all
preexisting diseases are covered, RSBY is actually a variety of universal health assurance and
not an insurance scheme in the sense of risk coverage.
So the incentive structure for Insurers should be such that there is reimbursement of minimum
administrative expenses while at the same time, no excess profits should be allowed.
While 15% could be allowed for administrative expenses of Insurer, this should not mean that
claims be disallowed if these exceed 85% of gross premium.
For other expenses to be incurred on publicity, the IT architecture, the distribution of smart
cards, medical audit etc. which would be incurred at the level of State Nodal Agency, these
would be flat amounts not linked to the premium for the scheme. If desired these could be
calculated in terms of a certain amount per capita. In any case these expenditures to be incurred
by SNA should not be loaded onto the premium.
Maharashtra scheme has provided a mechanism of Refund and also Annual Financial Review to
review the finances of scheme every year. A 5% buffer is provided to maintain some
accountability on the part of Insurer to ensure that due diligence is followed. Tamil Nadu also
has a refund clause which provides for cutoff of 80% for claims settlement. This is how the
clauses work:
ADJUSTMENT / REFUND
If there is a surplus after the pure claims experience on the premium (excluding Services Tax) at
end of the policy period, after providing 15% of the premium paid towards the Company’s
administrative cost, of the balance 85% after providing for claims payment and outstanding
claims, 90% of the left over surplus will be refunded to the Government within 30 days after the
expiry of the Run-off period.
ANNUAL FINANCIAL REVIEW
“Annual Financial Review” shall mean that if the Incurred Claims Ratio (Claims Paid Plus
Claims Outstanding) plus the Audited Administrative Expenses (as defined hereunder) exceed
110% of the Gross Premium (excluding Service Tax) then the loading in the Gross Premium
(excluding service Tax) will be in excess over 105% of the Gross Premium (excluding Service
Tax). For example:
a. If Incurred Claims Ratio (Claims Paid Plus Claims Outstanding) Plus Audited
Administrative Expenses (as defined hereunder) is 109.99 % of the Gross
Premium (excluding Service Tax) then there shall be no loading;
b. If the Incurred Claims Ratio (Claims Paid Plus Claims Outstanding) Plus Audited
Administrative Expenses (as defined hereunder) is 110 % of the Gross Premium
Final Draft Report
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(excluding Service Tax) then the loading will be 5%.(110-105)
c. If the Incurred Claims Ratio (Claims Paid Plus Claims Outstanding) Plus Audited
Administrative Expenses (as defined hereunder) is 115 % of the Gross Premium
(excluding Service Tax) then the loading will be 10%. (115-105)
d. “Audited Administrative Expenses shall mean the Administrative Expenses of
Insurance Company Ltd as per Audited Annual Accounts of the Company as on
31st March of the year immediately preceding the date of inception of the renewal
policy. In no case shall this be allowed to exceed 15% of Gross Premium
(excluding Service Tax) in the RGJAY Scheme.”
WORKED OUT EXAMPLES
ILLUSTRATION OF REFUND CLAUSE
Premium = Rs 100
Amount for Claims= Rs 85
Amount for Administrative Expenses of Insurer = Rs 15
CASE 1
Claims paid= Rs 70 (70% of premium)
Balance amount left out of Rs 85= Rs 85-70= Rs 15
Amount to be refunded to Government= 90% of Rs 15= Rs 13.5
CASE 2
Claims paid= Rs 90
Balance amount left out of Rs 85= Rs 85-90= 0 (minus amounts cannot be counted)
Amount to be refunded to Government= 0
CASE 3
Claims Paid= Rs 82 (82%)
Balance amount left out of Rs 85= Rs 85-82= Rs 3
Amount to be refunded to Government= 90% of Rs 3= Rs 2.7
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ILLUSTRATION OF ANNUAL FINANCIAL REVIEW CLAUSE
Premium is Rs 100 with 15% for administrative expenses of Insurer only.
But premium to increase only if Claims paid plus expenses crosses 110%. Loading to begin from
105%.
Refund of 90% balance if Claims are below 85%.
CASE 1
Claims paid= 94.9%
Total expenses= 94.9% + 15%= 109.9%.
There is no review and the premium remains Rs 100 for next year.
CASE 2
Claims paid= 98%
Total expenses= 98% + 15% = 113%
New premium would be loaded by 8% ie. 113% - 105%= 8%.
New premium= Rs 108
CASE 3
Claims paid= 80%.
Refund due= 90% of balance 5% premium (85% - 80%).
New premium= Rs 100
g. RECOMMENDATIONS ON INCENTIVES FOR INSURERS
1. ANNUAL FINANCIAL REVIEW AND REFUND: Clauses providing both for Refund
of premium and for Annual Financial Review as described above, could be followed in
RSBY. These clauses would guarantee a minimum 5% reimbursement to the Insurer
while also providing for some level of accountability in monitoring of expenses.
2. SOLVENCY RATIO FOR INSURERS: Only Insurers with solvency ratios of 1.5 as
mandated by IRDA should be allowed to participate in the RFP. The definition of
Solvency Ratio is: Available Solvency Margin/ Required Solvency Margin.
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h. INCENTIVE STRUCTURES FOR TPAs
Ideally the TPA is simply a manpower agency hired by the Insurer to process pre authorizations
and claims. An agency is needed since the manpower load varies from time to time.
But in the present system many Insurers reimburse TPAs on capitation fee basis, i.e. fee per
family insured. Such a payment mechanism immediately creates an incentive for artificial claims
control by the TPA to limit the number of claims. This mechanism creates separate financial
interests for the TPA distinct from the interests of the Government and also the Insurer. In many
situations, the TPA then does collude with hospitals to generate fraudulent claims or to
unnecessarily pad up claims for a consideration.
A question is often raised that what is the utility of the TPA and why cannot the Insurer do this
work itself. Insurers when asked, say that the processing of policies imposes a varying manpower
burden which they cannot directly handle. If they were to do so, then they would invite the
attention of the Industrial Courts and the various Labour laws to regularize those employees.
Hence excluding the TPA would most likely exclude the public sector insurers from the possible
bidders for the RSBY scheme. Given that public sector insurers today command 60% of the
health insurance market, excluding them in this manner may not be very desirable.
One way out of this situation could be to simply insist in the Agreement with Insurer that the
TPA should be paid only on per claim and per pre-authorization basis with no provision for
payment on capitation basis or +artificial claims control. This would reduce the TPA to the status
of a pure manpower agency and the conflict of interest would be substantially addressed.
Penalties for fraudulent behavior on the part of TPA and hospital would still need to be stipulated
in the agreement with the Insurer.
i. RECOMMENDATIONS ON INCENTIVE STRUCTURES FOR TPA
1. CHANGE THE RENUMERATION PATTERN OF TPAs TO ADDRESS
CORRUPTION: Currently most Insurers outsource health schemes like the RSBY to
third party administrators on capitation fee basis, i.e. a certain amount is fixed for TPA
per family insured. Such a financial arrangement creates a separate financial interest for
the TPA. When the claim ratios rise, many TPAs build a nexus with hospitals to commit
fraud. The TPA is purely a manpower agency and in order to ensure that it functions like
one, the tender for RSBY should clearly specify that the Insurer would only be allowed to
hire TPAs on per claim basis and per pre authorization basis. The capitation fee per
family method of reimbursement should be specifically dis-allowed. This would help
address the problem of corruption to a large extent.
2. IMPOSE STRICT SANCTIONS: Those TPAs found indulging in fraud and
malpractice could be penalized by monetary fines. But repeated violations should lead to
TPA being blacklisted by the Insurers and these names be circulated by the Ministry of
Labour to all Insurers working in the scheme with directions that no such blacklisted TPA
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is to be employed by any Insurer working with RSBY for five years from date of
blacklisting.
3. INFORM AGREEMENT WITH TPA TO SNA AND MOLE: It should be mandatory
for the Insurer to bring on record the agreement signed with TPAs under RSBY and
provide copy of contract to SNA and MOLE. It should also be mandated that sub-
contracting can only take place from the insurer to the TPA licensed by IRDA. Any
further sub-contracting by TPA will be considered a violation and strict sanctions shall be
imposed on the TPA.
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11. CONCLUSION
a. INSURANCE MODEL SEEMS BEST AT THE MOMENT In the light of the
above discussions, it seems that while there are pros and cons to the Self Insured and
Insurance model, the Self Insured Model does require a great deal of domain expertise.
The three states of Andhra Pradesh, Maharashtra and Tamil Nadu have built up a great
deal of expertise over the past few years much of which has been learned from insurance
companies. The sum of this expertise is attached as Annexures with this report which
runs into over 500 pages. Most states in India today do not possess this kind of expertise
in purchasing services from hospitals. Since such schemes as RSBY need to have
uniformity in structure for simplicity in operations, the Insurance model remains the only
option at this moment.
However in the states like Andhra Pradesh which are successfully running the Health
insurance schemes in Trust/Society/Department mode, such states shall be allowed to play
the role of insurance company for implementing the RSBY for better and effective
implementation by fully dovetailing RSBY with State Health insurance schemes.
Further states like Andhra Pradesh, Maharashtra and Tamil Nadu are willing to provide the
benefit of their learning experience to other states wherever required.
At the same time the State Nodal agencies should be strengthened. It would be desirable to
register the SNA as a separate Trust or Society but this is a decision which must be left to the
state government concerned.
We also need to remember here that the insurance companies were called onto the scene in the
first place because political interference made it very difficult for government agencies to
enforce any set of norms impartially. Political interference has been a very important reason for
most beneficiary oriented schemes to founder and lose track. In Maharashtra for example, a
health insurance scheme for poor people was run by state agencies for fifteen years. Within one
year of the insurance company coming onto the scene, costs came down to one third and many
hospitals openly acknowledged that earlier there had been no pressure to contain costs. Hospitals
are powerful interest groups. Politicians are under so much pressure from constituents to ask for
illegal favours that they seem to be looking for some external agency as a buffer against the
pressure. This is the main reason why many state governments started health insurance schemes
in collaboration with insurance companies in the first place. While reviling insurance companies
for being for profit entities is fine, we also need to take an objective look at the capacities of
government agencies to enforce any set of norms under political pressure.
b. TO PUT PATIENTS FIRST, ALL MEDICAL CONTENT SHOULD BE
PART OF TENDER DOCUMENT AND AGREEMENT WITH INSURER
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Having said that, it is important to build in all the expertise in operating health insurance
schemes as learned in these states into the RSBY for greater efficiency in service
delivery. All this paperwork whether on grading sheets for hospitals, infrastructure audit
forms, clinical protocols, hospital empanelment norms, mandatory investigations or claim
settlement guidelines, need to be part of the Expression of Interest for RSBY tender. It
should be compulsory for all state governments to incorporate all these guidelines into
their agreements with insurance companies irrespective of which Insurer it is. It is
through these guidelines alone that we can hope to encourage a patient centric model of
healthcare. Such clinical pathways and empanelment criteria put patients first and hence
need to be prioritized. Too often health insurance schemes are run for the profit of the
hospitals alone and the patient merely remains a means of achieving those profits.
c. CONTRACT WITH INSURER IS A LEGAL CONTRACT We need to
remember that the contract with an Insurance company is a legal document and
accordingly needs to be taken very seriously. Up to now, all the medical content in
Insurance schemes, government run or privately run, is part and parcel of the knowledge
of the TPA or the State Society. Unless it is made part and parcel of the Insurer's
Agreement right from the beginning, it would continue to cause disputes and avoidable
complaints by Hospitals and patients. These provisions cannot be left to oral negotiation
between State Nodal Agencies and different TPAs. In India we have a strong oral
tradition of learning as opposed to a written tradition. This also means that too often, such
learning does not form part of public private partnership contracts. This is one of the
main reasons for the patchy performance of PPP contracts in India. We should learn from
past experience given the importance of the task. There is no need to re-invent the wheel
and we also need to make the proposed MOU with hospital as part of the contract
between govt and Insurer.
d. CREATE AVENUES FOR FEEDBACK
Any scheme needs systematic feedback for mid-course corrections and constant
adjustments. By allowing the State Nodal Agency to run the Call center and to distribute
the beneficiary cards, the RSBY would create such mechanisms.
e. AUTHORISE THE SNA TO ENFORCE THE NORMS By allocating the tasks
of issuing beneficiary cards, medical audit, publicity and joint empanelment of hospitals
and practitioners, to the State Nodal Agency, we can authorize the State Nodal Agencies
to make these contracts a reality. A public private partnership does not decrease the work
of government; rather it increases our work since it entails a great deal of regulation. The
basic problem perceived in RSBY has been that by outsourcing the job lock, stock and
barrel to the Insurer, the government dis-empowered itself to regulate anything.
Regulation and monitoring are sovereign functions of government which cannot be
contracted out if the government still wishes to remain relevant to civil society.
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f. SANCTIONS AND INCENTIVES Finally this report has recommended a system of
incentives and sanctions put together to ensure that the patient centric norms
recommended are actually followed. The main problem in RSBY has been lack of
accountability of Insurers and Hospitals. Hospitals should be offered financial incentives
for improving quality of healthcare by linking Grading Sheet to package rates. So also
TPAs and Insurers are tied down by claim settlement guidelines. Insurers should be
offered the annual financial review of premium as incentive for good performance.
However all these incentives would work if the sanctions are also enforced. In the last
few years of RSBY operation, the numbers of hospitals and TPAs against whom penal
action was initiated are limited in number. This state of affairs must change.
Rule enforcement was an issue which came up repeatedly in the course of discussion. One
extreme view expressed was that if TPAs were to be paid on the basis of per claim and per pre-
authorization this would generate a huge number of fake claims by creating financial incentives
for pre-authorizations. It was also said that paying general practitioners on per incidence basis
rather than capitation fee basis would also lead to significant abuse. Here it is important to note
that rule formation and rule enforcement are intrinsic to any successful society. Unless we can
make and enforce rules, it would be difficult for any large scale system like the RSBY or indeed
anything to work at all.
Actually it is a very common complaint among civil servants that rules are routinely violated. So
far as Healthcare is concerned, the subject is even more important since it is difficult to obtain
optimum services from private providers unless the rules of the game are clear. We routinely see
a huge reluctance on the part of the Ministry of Health and Family Welfare to use private
hospital services or private practitioners for public health programs and the reasons cited are the
extremely varying quality of services provided. Common sense would suggest that there are
some public hospitals which are good and some which are bad and equally there are some private
hospitals which are good and some which are bad. What the Ministry really seems to be saying is
that in government hospitals there is a minimum standard of service which they do expect and
this is not the case in the private sector. However the job of creating norms for all service
providers, public or private, is that of the Ministry of Health itself.
The reason that watchdogs like the Medical Council of India have been relatively powerless is
because no such norms whether for hospital processes or by way of clinical pathways have really
been developed which could be up-scaled in a big way. The issue of medical abuse has no
meaning unless there is a norm or clinical pathway against which any specific act or behavior
could be assessed.
g. COSTS OF NORMLESSNESS ARE FARILY HIGH Lack of funds is one cost.
Absence of norms prevents the government from using the huge capital locked up in the
private healthcare sector while at the same time the government goes hunting for funds
under corporate social responsibility.
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But the most important costs are those which are levied on those service providers who prefer to
work with whatever norms do exist. The medical information gathered in the 500 pages of
Annexures with this document has been developed by such doctors and these constitute proof
that there are sufficient numbers of committed doctors and committed hospitals in India. It is
such doctors who have developed all this documentation. Failure to either prescribe or enforce a
norm penalizes these very people because it allows those who violate norms to go scot free. And
since practically everyone who breaks rules gets away scot free, there is immense pressure on the
better hospitals not to follow Standard Operating Protocols.
h. PENALTIES CANNOT BE PRIMARILY MONETARY
A monetary penalty has little long term value and it even encourages the idea that rule breakers
can pay a nominal cost and get away with it. Sanctions in order to be effective, should concern
themselves with the ability of the violator to practice his trade. So TPAs who practice fraud
should be blacklisted by the Insurer concerned for a period of five years and the government
should circulate such names to all Insurers so that there is a loss of livelihood for the TPA
concerned. Similarly in the case of hospitals which refuse to follow SOPs, while there could be a
de-empanelment for that procedure to begin with, any consistent violation should entail a
recommendation that the license of the hospital to operate under the State Nursing Homes Act
should be cancelled. Minimally such errant hospitals should not be empanelled by Public Health
Departments for providing health services to employees. Given that government insurance
schemes and schemes associated with government command a 35% market share, this is
sufficient economic clout for private hospitals to take notice. But this is useful only where one is
willing to use the clout. Here the issue of political will is also important since this is rarely
present.
i. THE CHOICES BEFORE US
The basic issue remains that such complex and challenging schemes require a sound system of
rules and regulations, in order to work well. RSBY has many potential benefits to offer to
society. But in order that those benefits reach the people, just rules and regulations which
encourage patient centric healthcare need to be defined and factored into the running of the
scheme. Whether it is norms governing hospital empanelment, linking hospital payments with
good practices, defining clinical pathways or the numerous other rules which are the essence of
any healthcare scheme, all these rules are crucial to good governance. Given that RSBY is a very
significant intervention in the field of healthcare and if that intervention is to achieve positive
results, it should be governed by norms which promote good health practices. The writing on the
wall is clear enough. But do we have the will to act upon it that remains to be seen.
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LIST OF ANNEXURES
No Description
1 Terms of Reference of this Committee
2 Sample Clinical Protocol for Angioplasty used in Maharashtra State
Health Insurance Scheme. Remaining 120 protocols available on URL:
jeevandayee.gov.in
2A Guidelines for Paediatric Medical Management used in Tamil Nadu
2A (1 to 12) Clinical Protocols developed in Maharashtra
3A List of Mandatory Investigations being used in Aarogyasri Insurance
Scheme of Andhra Pradesh
3B List of Mandatory Investigations for 308 common procedures between
RSBY and Maharashtra State Health Insurance Scheme
3C List of Mandatory Investigations for Tamil Nadu State Health Insurance
Scheme
4 RSBY procedures for which pre-authorization should be done
5 Scope of Out Patient Services
6 Claim settlement/ adjudication guidelines in place in Maharashtra
7 Agreement between Hospital and Insurer recommended by Maharashtra
state
8 Suggested Key Performance Indicators for Hospitals
9 Medical Audit form used in Andhra Pradesh
10A Hospital Grading Sheet used in Maharashtra
10 B Hospital Grading Sheet used in Tamil Nadu
11A Grade Sheet used in Maharashtra for Single Specialty Hospitals
11B Grade Sheet used in Tamil Nadu for Single Specialty Hospitals
12A Hospital Infrastructure Audit Form Used in Maharashtra
12B Hospital Empanelment form used in Andhra Pradesh
12C Hospital Empanelment form used in Tamil Nadu
13 Note on Arogyasri Scheme of Andhra Pradesh