third party administrators and health insurance in india
DESCRIPTION
Research Project ON TPA Indore RegionTRANSCRIPT
ABSTRACT
Role Of Third Party Administrator And Policy Holders Perception Page 1
The introduction of TPAs was made by Insurance Regulatory and
Development Authority (IRDA) in order to infuse a new management
system and to regulate the healthcare services and costs. In other words,
the prologue of TPAs was made on the expectation to ensure better
services to insurers as well as to insured. While introducing TPAs certain
conditions, code of conduct/role defined by the IRDA. In this study an
attempt was made to examine the perspective of Insured towards TPAs
and role played by TPA towards policy holders in respect of guidelines set
by IRDA. so as to come out with conclusive finding in relation to
parameters where parity and deviation exist between role defined and role
played. The present study is mainly based upon Primary data colled threw
questionnaire , IRDA Notification Dated 17th Sep 2001 and past research
undertaken in this area. The results of the study provided that there is lack
of knowledge about coverage and exclusion in policies; failure to meet the
expectations of parties involved by TPAs ; delay in settlement of claims;
failure to meet the service responsibility; indirect cost to consumer; cost of
healthcare and management increases.
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INTRODUCTION
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The health infrastructure in India is facing daunting challenge of meeting
the health goals and complexities emerging from the changing disease
pattern. The proliferation of various healthcare technologies and increase
in cost of care has necessitated the exploration of health financing options
to manage problems arising out of increasing healthcare costs. Health
insurance is emerging fast as an important mechanism to finance the
healthcare needs of people. Further, the uncertainty of disease or illness is
accentuating the need for insurance system that works on the basic
principle of pooling of risks of unexpected costs of persons falling ill and
needing hospitalization by charging premium from a wider population base
of the same community. However, the complexity of health insurance
industry has been much talked about but less understood especially in
Indian scenario. With the advent of third party administrators (TPAs) this
sector has assumed a new dimension. TPAs are presumed to infuse new
management system and enrich knowledge base of managing healthcare
services and costs. Their presence is aimed at ensuring higher efficiency,
standardization and improving penetration of health insurance in the
country. TPAs potentially have a wider role to play in standardization of
charges and managing cashless services in health insurance. However,
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their actual roles and responsibilities have remained less understood, less
clear and much debated.
There are questions that in what ways the TPA is going to influence the
developments in the health sector. The influence of TPAs to a large extent
would be determined by their activities, the way they organize their
services and their revenue generation model. In present form, TPAs earn
their major revenue from fees charged as commission on insurance
premium. Insurance Regulatory and Development Authority (IRDA), the
regulatory body for insurance sector in India has standardized this rate.
Besides this, TPAs have a potential source of revenue from benefit
management, medical management, provider network management, claim
administration and information and data management. However, the
insurance sector still faces challenge of institutionalizing the TPA services
and there is substantial scope for improvements. TPAs also face challenge
of developing appropriate system of financing their operations. These
include lack of data to determine price of products and ability to negotiate
payment rates with providers, a regulatory framework that does not
recognize the unique feature of health insurance products, lack of quality
assurance measure for health providers, and lack of consumer awareness
about the benefits of health insurance. The studies strongly argue broader
Role Of Third Party Administrator And Policy Holders Perception Page 5
role of IRDA in amending current regulations so that some of the sources
of malpractice could be stemmed.
We carried out a survey study of Perception Of Policy Holders and Role Of
Third Party Administrator (TPA) involved in the health insurance industry.
This paper attempts to present and discuss the finding of this study. The
study focuses on developing an understanding what policyholders think
about the role played by TPAs in the insurance industry. In the present
survey we focus on Mediclaim policyholders in Indore, Madhya Pradesh.
The paper specifically aims to:
Understand the perception of Policy Holders about the performance of TPA
system;
Understand awareness among the policyholders of health insurance
Role of TPA in respect to guidelines set by IRDA.
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REVIEW OF
LITERATURE
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Parekh (2003) examined the training aspects of the TPAs and concluded
that there is a dearth of knowledge and training in the TPA community and
training for the leadership team alone is inadequate. The lack of training at
most insurance companies is also woefully insufficient and alarming. So
the study suggested that IRDA should arrange for adequate training
facilities for TPAs which will enhance their knowledge and the ultimate
benefit will be reap by the community. Sureka (2003) conducted a study on
the TPAs and its regulator and concluded that TPAs are forced to provide
service to the policyholder for an obsolete product – the Mediclaim policy
which was introduced at least almost two decades ago. Beside this if the
policyholder is made to pay for the services he is availing, then why is the
insurer imposing a TPA on the policyholder? The study provided that a
policyholder should have the right to accept or refuse the services of a TPA
for such absolute products. Gupta, Roy and Trivedi (2004) examined the
role of TPAs and the issues that required to be taken into consideration
while evaluating their usefulness and functioning in India. The study based
on a series of meetings, discussions and interviews with various TPAs,
insurance companies and providers. No doubt the TPAs face different
barriers in terms of capital, capacity and connections, but still they are
providing cashless transaction at the time of service delivery to the
Role Of Third Party Administrator And Policy Holders Perception Page 8
customers. The IRDA and Health Ministry should come together so as to
ensure TPAs which in turn will ensure active role of the TPAs in
Community and Universal Health Insurance Schemes. Bhat and Babu
(2004) provided that introduction of IRDA has paved the way for (TPAs)
third party administrators who are playing the role of insurance
intermediaries in setting up of managed health care systems. The objective
behind setting up of TPAs was to ensure better services to policy holders
and to mitigate the negative consequences of private health insurance.
However the TPAs face immense challenges in the health sector because
of demand and supply side complexities of private health insurance and
health care market. IRDA has defined the role of TPAs as insurance
intermediary in the management of claims and reimbursement, but at the
same time their role is not well defined in controlling the cost of health care
and ensuring appropriate quality of care. Mohapatra (2005) provided that
TPAs form a vital link between insurers, healthcare service providers and
policyholders. Beside this also provided that for a smooth functioning of the
system, the TPAs should be judiciously governed and meticulously
regulated. Under the present dispensation, the issues of standardization/
governance between the TPA and the providers is left to the vagaries of
market forces, the respective parties flexing their muscles to browbeat one
Role Of Third Party Administrator And Policy Holders Perception Page 9
another, forcing the TPAs to negotiate local agreement. Further it is
recommended that IRDA constitute a consultative mechanism consisting of
representative from providers, insurers, TPAs and consumer bodies to
attack the various issues affecting smoother governance. If need be,
necessary changes can be brought about in the regulatory compliances.
Bhat, Maheshwari and Saha (2005) ascertained the experiences and
challenges faced by hospitals and policyholders in availing the services of
TPA in Ahmedabad, Gujarat. The results of the study shown that only a
small percentages of respondents have knowledge about existence of
TPA, there is substantial delay in settlement of claims between TPAs and
health care providers, administrators of hospital perceive burden in terms
of efforts and expenditure after the introduction of TPA. The study
concluded there is no mechanism to appraise the performance of TPAs
and regulatory body need to focus attention on developing mechanism, in
order to strengthen the TPAs so as to ensure smooth delivery of TPAs
services in the emerging health insurance market. Ruchismita, Ahmed and
Rai (2007) highlighted the challenges in financing health in India and
examined the role of health insurance in addressing these challenges. The
study provided with an operational framework for developing sustainable
health insurance model under national rural health mission which will
Role Of Third Party Administrator And Policy Holders Perception Page 10
respond to the contextual need of different states. Moreover innovative
pilots of partner agent model led micro insurance could give useful insights
for designing a national level programme, led by an apex body could
systematically impact the health system in the country. Jaswal (2010)
examined the cashless hospitalization which was evolved during the last
decade, as an integral part of health insurance claim offering, making claim
under health insurance policy indeed a customer friendly process. The
study concluded that the practice to pay claims through physical cheques
is quite outdated and inefficient; it would benefit all, if newer methods of
payment like electronic fund transfer were to be implemented. Moreover,
Indian medical industry being unregulated, there are no standard treatment
guidelines or uniform medical protocols which are followed by medical
professional all over the country, in all hospitals.
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HEALTHCARE
SYSTEM AND ROLE
OF HEALTH
INSURANCE
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India has developed an extensive network of healthcare infrastructure. The
system envisages availability of publicly funded healthcare to all,
regardless of their ability to pay. However, over a period of time due the
expansion in size and shortfall in budgetary support, the public healthcare
system has lagged behind in terms of its ability to meet the challenge of
fulfilling the health needs of large segment of population. To meet this
challenge partially, private healthcare sector has grown in size and scope.
Consequently the present healthcare system is characterized by having
providers belonging to ownership of both public and private and providers
practicing in different systems of medicine. Both public and private facilities
provide health services, but the bulk of the curative services are skewed
towards the urban areas and dominated by the private sector. According to
the recent Human Development Report (2013), India ranks 136 out of 187
countries in terms of public spending on health, while in terms of private
spending, the country ranks 18. Increasing per capita income in the country
is further increasing the need of health expenditures. For every 1 percent
increase in state per capita income, per capita public health expenditure
has increased by around 0.68 percent while for every 1 percent increase in
real per capita income the real per capita expenditure of on health has
gone up by 1.95 percent (Bhai and Jain 2004a and 2004b). Private health
Role Of Third Party Administrator And Policy Holders Perception Page 13
expenditure in nominal terms is growing at 18 percent per annum. With the
proliferation of medical technology and new treatment protocols, the health
care costs are increasing. These developments justify the need for health
insurance. Though the need for health insurance is high but its growth has
been slow. One of the reasons for its slow growth has been regulations in
this sector. Table 1 presents the major events in development of insurance
sector in India.
With the passage of the Insurance regulatory and development authority
(IRDA) Bill 1999, the industry has undergone a transformation. It has
opened the insurance sector for private players. This openings up of
insurance sector and growth of private healthcare system, particularly
characterized by setting up of corporate hospitals, poses lot of challenges
to be addressed by the insurance industry and its regulators. Some of the
key challenges faced by the industry are summarized below.
An estimated one-third increase in claim amount due to the moral
hazard, the adverse selection problem and/ or the provider-induced
demand;
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Rationalizing the cost structure of treatment in a private healthcare
sector that is characterized by uncontrolled and unregulated
expansion. Currently more than one-third of reimbursements are
made towards doctor’s fees, followed by diagnostic charge which
accounts for about one-fourth ;
Lack of actuarial data, lack of standardized billing and under
reporting of information by private providers.
High administrative cost insurance companies. took on an average
121 days to settle the claim
The evolution of a new body for cash-less claim processing in the form
of Third Party Administrators TPAs marks a new chapter towards
addressing some of the problems of health insurance industry.
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THIRD PARTY
ADMINISTRATOR
AND
THEIR ROLE
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Third Party Administrator (TPA) was introduced through the notification
on TPA-Health Services Regulations, 2001 by the IRDA. Their basic
role is to function as an intermediary between the insurer and the
insured and facilitate the cash-less service of insurance. For this service
they are paid a fixed percent of insurance premium as commission. This
commission is currently fixed at 5.6% of premium amount.
The core Product or service of a TPA in ensuring cashless
hospitalization to policyholders. Intermediation by TPAs ensure that
policyholders get hassle free services, insurance companies pay for
efficient and cost efficient services, and healthcare provider get their
reimbursement on time. By doing this it is expected that TPAs would
develop appropriate systems and management structure aiming at
controlling costs, developing protocols to minimize
treatments/investigation, improve quality of services and ultimately lead
to lower insurance premiums. However, the system is currently going
through teething troubles. Cash- less policies, where the insurer directly
pays the hospital bills to the healthcare provider, have not very fully
materialized
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As of April 2013, 31 TPA Health services are registered with IRDA.
They, in their current form in India are suffering from weak hospital
networking, delay in issuing of identity cards to policy holders, poor
standardization of billing procedures for hospitals. The industry is feared
to be suffering from an informal nexus among corporate insurance and
low on individual. The current survey attempts to understand the
concern of awareness among policy and awareness among
policyholders in Indore, Madhya Pradesh about the performance of
TPAs and their Role.
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METHODOLOGY
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We chose to study Indore, Madhya Pradesh as it has emerged a major
healthcare destination. Proximity to markets good purchasing power,
availability of resources, good infrastructure and an official vision towards
growth of entrepreneurship are some of the factors that enabled Indore to
achieve high growth of private healthcare facilities. Indore is the centre of
health care in central India.
Indore is home to 51 public health institutions, including 1 district hospital,
2 civil hospitals, 8 primary health center, 21 sub-health centers, 13 civil
dispensaries, 2 poly clinics, 2 maternity home, 1 TB hospital and 1 TB
sanatorium which is higher than any other city in state.[14] The city hosts a
good number of private hospitals too. The prominent hospitals of Indore
include Maharaja Yeshwantrao Hospital, Bombay Hospital, T. Choithram
Hospital, CHL Apollo, and Dr Jafrey's Indore Chest Centre etc. and with the
new additions like leading hospital brands including Fortis ,
Medanta and Max Hospitals it is all set to become a centre for quality
health care treatment in years to come.
Indore also has some specialized hospitals located outside of the core city.
These hospitals include Choithram Netralaya for comprehensive eye care
and the Bombay Hospital which is the largest private hospital in central
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India and recently begged the India Healthcare Award for “Multi Specialty
Hospital of the Year”
The share of in -patient between public and private sector in Indore is 44.7
percent and 55.3 percent as against national average of 50.4 percent and
49.6 percent (Indore Medical Association). Indore has about 104 doctors
per 100,000 persons and 97 beds per 100,000 persons. On the other hand,
Indore is also known for many innovative models of health care delivery
system in the non-government sector. A large number of facilities, mainly in
the urban areas and now even in some rural areas, are set up and
managed by charity trusts run by the corporate sector, philanthropists or
religious organizations. Large private sector health care facilities cater to
the high-and middle-income groups. With a mix of centralized and
decentralized health care delivery, Indore represents in average Indian city
in terms of health indicators and is chosen for the survey.
Introduction of TPA affects primarily three stakeholders namely the
healthcare providers/institutions, insurance companies and policyholders.
Based on literature review of previous findings questionnaire was prepared
for policyholders of health insurance and secondary data was collected for
IRDA. The questionnaires were responded by policyholders. The
objectives of these questionnaires were to understand the perception
Role Of Third Party Administrator And Policy Holders Perception Page 21
awareness and experiences of policyholders with TPA. The key variables
included in the questionnaires and rationales for choosing the variables are
discussed below in brief.
Influence in developing standard treatment procedures/protocols:
One of the problems with the private healthcare sector has been its
uncontrolled and unregulated expansion. There is lack of adequate
standards. Problems of poor billing system and under-reporting have
resulted into lack of availability of information for decision making at
various levels. Absence of regulation and lack of standardization of the
private healthcare market had led to high claim ratio. This also leads to
problem of the moral hazard resulting into over-billing. This study examines
the views of empanelled healthcare providers about the role of TPAs in
standardizing treatment norms and cost of procedures.
TPA services when policyholders need them
TPAs can follow each case in an individualized way, arrange for
specialized consultation for the patient, ascertain false claim and thereby
Role Of Third Party Administrator And Policy Holders Perception Page 22
reduce the moral hazard and provider induced demand. TPAs could also
do comprehensive review of records and maintain constant communication
with healthcare providers and families and evaluate the outcome of
treatment and have adequate data to compare it across different services
providers. TPAs can also play important role in tracking the case of the
insured at the hospital and streamline the claim process. They collect all
the bills, reimburse them and send all necessary documents for the
consideration of claims to the insurer. This gives them an opportunity to
design and develop information systems which would allow them to
analyze data regarding hospital admissions, ascertain the health needs of
patients and check for effective treatment protocols, tracking documents
pertaining to each case and tracking shortfalls in claims. This study
examined these different roles played by TPAs for providers and
policyholders perspectives.
Time taken to settle claims
TPAs were introduced as intermediaries to facilitate claim settlement
between the insurer and the insured. The agreement between TPAs and
healthcare facilities provides for monitoring and collection of necessary
Role Of Third Party Administrator And Policy Holders Perception Page 23
information, documents and bills pertaining to the treatment. Documents
are examined and after processing sent to the insurance company for
reimbursement. TPAs have the responsibility of managing claims, getting
reimbursement from the insurance company and paying to the healthcare
provider. It is expected that with the introduction of TPA services, the claim
settlement process would be simplifies. IRDA has suggested that all claims
should be settled in seven days. Outsourcing claim-processing services
may help in reducing the claim period, but settling claims in seven days
looks very ambitious target in current scenario.
Training and commitment of TPAs
TPAs generally have in house expertise of medical doctors, hospital
managers, insurance consultants, legal experts, information technology
professionals and management consultants. The effectiveness of TPAs in
managing claims and reimbursements depends on their bargaining power
vis-à-vis healthcare service providers. The IRDA regulations envisage at
least one of the directors of the TPA should be a qualified medical doctor
registered with the Medical Council of India. The CEO or CAO of the TPA
should have successfully undergone a course in hospital management
from an institution recognized by the IRDA and passed the licentiate
Role Of Third Party Administrator And Policy Holders Perception Page 24
examination conducted by the Insurance Institute of India, Mumbai. Apart
from this, she should have undergone practical training of at least months
in the field of health management. TPAs should have access to competent
medical professionals to advise insurance companies and clients on
various matters..
Awareness about TPA services
With the introduction of TPA, insurers outsource their administrative
activities to TPAs. Their activities include issuing identity cards to the
policyholders, 24-hour help-line for customer services, informing the
customers regarding empanelled hospitals, arranging for specialized
consultation and claim processing during admission of the policyholders.
Hence, it is expected from them that they have strong communication skills
in dealing with the policyholders. In a traditional insurance market, heavily
dominated by insurance agent, knowledge and impact of TPA is a matter of
determination. This survey of policyholders attempts to understand the
level awareness and knowledge among the policyholders about TPA
services.
Role Of Third Party Administrator And Policy Holders Perception Page 25
Knowledge about coverage and exclusion in policies
Examination of exclusion clauses in the policy is imperative before
authorizing admissibility and further treatment. There is a real lack of
knowledge about health insurance and the role it can play in mitigating
risks and preventing economic hardship.
Services and consumer education by the TPAs
TPAs are expected to provide value added services to the consumers
which include arrangement of ambulance services, medicines and
supplies, guide members for specialized consultation, provide information
about health facilities hospitals, bed availability, organization of lifestyle
management and well-being programs and 24-hour help-lines.
Policyholders will be directed to an empanelled hospital with which TPA
has tie-up arrangement. However, policyholder has a choice to go to any
hospital. But cashless facility will be available at only empanelled hospitals.
To put in short, the jobs of TPAs is to maintain database of policyholders
and issue them identity cards with unique identification numbers and
handle all the insurance policy related issues including claim settlements.
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Experiences of policyholders with healthcare providers
Hospitals empanelled with TPA appointed by insurance company agree on
providing cashless facility to policyholders of the insurance. TPAs directly
pay the healthcare providers. For this TPAs get reimbursements from the
respective insurance company. However, after the introduction of TPA,
many hospitals complain delay in getting their reimbursement of bills.
Under earlier system the patient directly paid them.
Only public insurance companies data were available for this study, as
private non-life insurance companies dealing with health insurance
products were not willing to share their customer database. In all 62
policyholders were selected at random for the purpose of survey. Finally 50
policyholder responses were found usable and have been analyzed here.
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Sample Characteristics
Out of the 50 policy holders interviewed, 76% are male respondents while
24% are female respondents. The mean age of respondents is 48 years.
Most of the respondents belong to nuclear family i.e. 76% while there were
only 6% large families and 18% belong to medium family size of 4 to 6
persons in family.
A large part of respondents were married i.e. 68% and only a small portion
of 32% were single.
All the respondents selected have taken claim ones in the duration of
owing their policy.
Major people took claim ones even owing policy for a long time of 5years
or above.
Sample Characteristics Mean Standard Deviation
Age Of respondent 48.59 11.61
Family Size 4.32 1.44
Year Since Insured 3.34 2.85
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FINDINGS
Period since Insured Vs Claim Incurred
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All the respondents have taken claims ones in their policy period. A
large part of people i.e. 36% have taken claim ones during their policy
period. Even among them 12% people took the claim first time in 5
years.
This shows that people took claim as of required even during a long
tenure. And gradually as year increases number of claims per year also
increased and vice versa in case of claim incurred as number of times
increased claims decreased.
Period Since Insured
Claim Incurred
Ones Twice Thrice 4 Times
5 Or Above
Total
1 Years 3 32 Years 4 3 73 Years 2 5 3 104 Years 3 3 5 3 14
5 Years and above
6 3 2 3 2 16
Total 18 14 10 6 2 50
Hospital Network
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TPAs have allied with different hospital in town and cities to provide
healthcare facilities to people. So that the policy holders can avail cashless
facilities in that hospital and the process of claims become easy.
Usually TPA have vast hospital network hence people can get cashless
medical facilities at ease in each and every location yet there are some
places where allied hospitals of TPAs of some respondents were not
available hence they have to face problems yet they can get admitted in
any hospital and claim non cashless claim.
Out of 50 respondents 18 respondents were fully satisfied from their TPAs
hospital network while only 2 respondents were at uncomfortable situation
while 9 respondents response was neutral towards this which meant they
had no problem due to the hospital network.
Awareness
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Awareness about charges
Out of 50 respondents 38 respondents knew that they are charged
additional for the TPA service s while 12 had no idea those insurance
/health care insurers’ charges extra for the Third party services @
5.6% of total policy premium.
Yes No
Expenditure Coverage 36 14
2.5
7.5
12.5
17.5
22.5
27.5
32.5
37.5
Expenditure Coverage
Awareness about Policy
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Out of 50 respondents only 25 respondents knew what diseases are
covered in policy and 3 had no idea about the diseases coved in
policy. While 23 respondents knew diseases not coved in policy 5
had no idea about the diseases not coved in policy. Policy holders
don’t have adequate knowledge of illness covered and not covered in
their policy which can cause them failure of claim under a specific
diseases or illness not coved under their policy.
Very less people had the idea of cashless services and allied
hospitals where they can have cash less benefits still due to the ID
cards issued by TPA people can easily use the cashless facility.
People had no idea about the procedure of reimbursement of claims
without hospitalization which could be done in case of acute diseases
for a period of not more than 1 year from date of illness. (IRDA)
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POLICY HOLDERS AWARENESS
Awarness
Disease
Coverd
Disease
Not
Coverd
Cashless
Service
TPA
Allied
Hospitals
Reimbursement
Without
Hospitalization
Percentage
(%)
Completely
Aware 25 23 12 10 028
Aware 11 9 8 10 2 16
Netural 4 6 2 10 2 9.6
Little Idea 7 7 9 7 5 14
No Idea 3 5 19 13 41 32.4
Role and Services of TPA’s (As Per IRDA)
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PROVIDERS OF SERVICES AS AND WHEN NEED
The primary job of the TPA is to provide services as and when need
by the insurers and insured. Here the TPAs follow each case
individually and arrange for specialized consultation and medical
facilities for the insured. The insured will be provided with adequate
services with minimum loss of time and effort to find out the
healthcare providers. At the same time TPAs maintain
comprehensive records of communication between healthcare
providers and families and evaluate the outcome of the treatment
thereby reduce the chance of moral hazards and provider induced
demand. But out of 50 respondents Arrangement of special
consultation was done by TPA only for 3 respondents while TPA paid
no heed in providing special consultation to Other Respondents.
According to respondents only 10% TPA visited hospital during
patient’s admission TPA were more attentive towards the financial
matters as enquiring about room rates and rent and length of stay.
TPA is not working in accordance with role defined by IRDA.
ACTIVITIES DURING PATIENT ADMISSION
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ACTIVITIES DURING PATIENT ADMISSION Response Count
Yes NoTPA arrange for Special Consultation 3 47
TPA Ask about treatment Protocol 13 37TPA enquire about room rent and rates 37 13
TPA enquire about length of stay 29 21TPA came to Hospital 5 45
Average Response 17.4 32.6
Claim Settlement
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IRDA one of the objectives behind introduction of TPAs was to streamline
and simply the claim settlement process. TPAs which were authorized by
IRDA and appointed by insurance companies agree upon providing
cashless facility to policyholders i.e. the policyholders are not required to
make payment to hospital rater TPAs will make payment.
Agreed Time Schedule
Response Percentage
1 week To 1 month 34 681month to 2 month 12 242month to 3 month 4 83 month and above 0 0
Vs
Actual Time Of Claim Settlement
Response Percentage
1 week To 1 month 12 241month to 2 month 28 562month to 3 month 8 163 month and above 2 4
Earlier for this hospitals were paid directly by the patient himself, but with
the introduction of TPAs, now the hospitals are paid by them. But before
paying to the hospitals they examine all the documents, duly process them
and thereafter submit the same to insurance company for reimbursement.
Role Of Third Party Administrator And Policy Holders Perception Page 37
The time agreed for claim settlement with TPA is less than 1 month, but
even after 74% Claims were delayed by TPA and even some TPA provide
more than 1 month period for settlement of claims. The claims of only 26%
respondents were met on time.
TPA take 1 to 2 month for settlement of major claims and even delay some
claims to more than 3 months. According to IRDA if a claim if delayed for
mare then 30 days Insurance company has to provide interest over the
claim amount at 12% per annum and pay to the insured but still TPA after
such delay don’t pay the interest is major cases.
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CONCLUSION
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This study discusses the perception of health insurance policy holders and
role of TPA in relation with IRDA guidelines. The knowledge of Policy
Terms and services are known by a small part of respondents while a large
part of respondents are unaware of the policy terms. General awareness
about TPA and service they provide is low. TPAs are the interference
between the insurer and the insured and they are in position to educate
policy holders about policy and health coverage. However their role in
consumer education does not infuse much confidence on their intentions or
ability to do so.
TPA service needs to focus on development of their competence and
capacities and take care of various operational issues in provision of
services. This will need significant amount of investment on developing
their human capital. TPAs have role in containing cost of healthcare and
standardize its quality. However the current level of services raises doubt
on their ability to take this task seriously and effectively in near future.
Currently there is no mechanism in place to appraise the performance of
TPAs. IRDA present role of TPA appraisal is more based on financial
factors rather than customer satisfaction. There is a need to link incentive
Role Of Third Party Administrator And Policy Holders Perception Page 40
of TPA with their performance rather than fixed percentage of policy
premium.
The study shows the need of future research to examine the impact of TPA
on health sector functioning. This study doesn’t indicate the effect of TPA
on Healthcare services this shows the perception of policy holders and the
role played by TPA in serving the policy holders. We propose that impact of
TPA will bring changes in economies and service deliverance.
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References
Parekh, N. R. (2003) “TPA Training – For Whom” Journal of Insurance Regulatory and Development Authority, March.
Sureka, G.P (2003) “TPAs and The Regulator”, Journal of Insurance Regulatory and Development Authority
Gupta, I., Roy, A. and Trivedi M. (2004) “Third Party Administrators Theory and Practice” Economic and Political Weekly, Vol. 39, No. 28.
Bhat, R. and Babu, K.S. (2004) “Health Insurance and Third Party Administrators Issues and Challenges” Economic and Political Weekly, Vol. 39, No. 28.
Mahopatra, S. K (2005) “A Healthy Ground For TPAs” Journal of Insurance Regulatory and Development Authority, May.
Bhat, R., Maheshwari, S. and Saha, S. (2005) “Third Party Administrators and Health Insurance in India: Perception of Providers and Policyholders” Indian Institute of Management Ahmadabad.
Ruchismita, R., Ahmed, I. and Rai, S. (2007) “Delivering Micro Health Insurance through the National Rural Health Mission” Institute for Financial Management and Research centre for insurance and risk management, a strategy paper, August.
Jaswal, M. (2010) “Understanding the TPAs” Journal of Insurance Regulatory and Development Authority, August
Role Of Third Party Administrator And Policy Holders Perception Page 42
FIGURES
Role Of Third Party Administrator And Policy Holders Perception Page 43
Gender Of Respondents
Male Female
Figure 1
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Age Of Respondents
18-24 24-4040-5050-60
Mean Of Age OF Respondents : 48.59
Role Of Third Party Administrator And Policy Holders Perception Page 45
Figure 2
Marital Status Of Respondent
Single Married
Out Of 50 Respondents 34 Respondents Were Married And 16 Respondents Were Single.
Figure 3
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Family Size Of Respondent
1 to 4 4 to 6 More then 6
38
96
Family SizeFamily Size
Role Of Third Party Administrator And Policy Holders Perception Page 47
Figure 4
Annual Earning Of Respondent
0-2 Lakhs 2-5 Lakhs 5-7 Lakhs 7 Lakhs and Above
Annual Earning 2 16 17 15
1
3
5
7
9
11
13
15
17
Annual Earning
Axis Title
Figure 5
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Mediclaim Policy Complete Expenditure Coverage
Yes No
Complete Expenditure Coverage 36 14
2.5
7.5
12.5
17.5
22.5
27.5
32.5
37.5
Complete Expenditure Coverage
DOES YOUR MEDICAL POLICY COVER COMPLETE MEDICAL EXPENDITURE
Figure 6
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Are you charged For TPA Services?
Yes No
Policy Holders Charged For TPA Services 38 12
2.5
7.5
12.5
17.5
22.5
27.5
32.5
37.5
Policy Holders Charged For TPA Services
Axis Title
Figure 7
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TPA Hospital Network
Fully Satisfied Satisfied Netural Un Satisfied Not Satisfied0
2
4
6
8
10
12
14
16
18
20
TPA Hospital Network
TPA Hospital Network
Satisfaction level of TPAs Allied hospital network.
Figure 8
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Policy Holders Awareness
1 2 3 4 5
Disease Coverd 25 11 4 7 3
Disease Not Coverd 23 9 6 7 5
2.5
7.5
12.5
17.5
22.5
27.5
Chart Title
Figure 9
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Policy Holders Awareness
1 2 3 4 50
5
10
15
20
25
30
35
40
45
Cashless Service TPA Allied Hospitals Reimbursement Without Hospital-ization
Figure 10
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Services At Time Of Patient Admission By TPAs To Policy Holders
TPA arrange for Special Consulta-
tion
TPA Ask about treatment Proto-
col
TPA enquire about room rent
and rates
TPA enquire about length of
stay
TPA came to Hospital
Yes 3 13 37 29 5
No 47 37 13 21 45
2.5
7.5
12.5
17.5
22.5
27.5
32.5
37.5
42.5
47.5
Figure 11
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Claim Settlement
74%
26%
Claim Settlement Delayed On Time
Figure 12
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Claim Settlement
0-20 20-40 40-60 60-80 80-1000
5
10
15
20
25
Percentage Of Claim Paid
Percentage Of Claim Paid
Figure 13
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SAMPLE
QUESTIONNAIRE
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