The Insurance Regulatory and Development Authority (Irda) in consultation with the health ministry proposes to lay down standards for hospitals and come out with an accredition system for hospitals.
The ministry will have to be associated as it falls under their purview, and not that of the insurance regulator.
The initiative, however, has been taken by the Irda together with non-life insurance companies in an attempt to check hospitals from overcharging patients, and thereby bring down the high claims ratio.
Hospitals in the country have been over-charging patients specially those who on admission state that they have Mediclaim (insurance) cover.
In the absence of any government standardisation levels, billings vary and this is not necessarily in keeping with any minimum hospital facility requirements.
At present, the four state-owned insurance companies are experiencing a high claim ratio in the region of 130 per cent in Mediclaim. That is to say, of every Rs 1 collected in premium, Rs 1.3 is spent in claims.
Ican Medicare managing director George Mathew M said: "Forty per cent of the hospitals have two different billings for patients. For those who admit to having insurance cover, bills are inflated by 40 to 50 per cent and in some cases even 120 per cent."
The inflation in bills is not restricted to the room charges, but also in the area of consultation fees, the number of unrelated tests and investigations taken up and the number of doctors that visit the patients, he said.
IRDA is setting up a sub-committee which includes representatives from the health ministry, state-owned and private non-life insurance players and third party administers.
Also on the cards is clinical standardisation, which would outline the processes through which an operation is undertaken in terms of the tests required.
PricewaterhouseCoopers partner Sandip Patel said that a lot of US-based health insurance companies though keen to tap the Indian market, are wary of the lack of standardisation facilities.
"There is no accredition or standardisation that will help insurers," said Patel.
Once the Irda and the health ministry put in place the necessary standardisation process for hospitals, hospitals will be classified into three key categories in terms of facilities available, level of expertise at the hospital as well as the city in which they are situated, said sources close to the Irda.
"The fee structure will depend on the overheads, and infrastructure costs, as a hospital in Mumbai is clearly going to experience higher costs than the one in Ludhiana," he said.
Said a private insurance player: "We will find it difficult to reimburse the cost of healthcare when we introduce a cashless system. This is because hospitals have been overcharging patients. There is no standard system or any checks or balances in place."
In the absence of any standardisation or accredition of hospitals, even TPAs, will find it difficult to settle claims.
