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Health Insurance TPA of India Ltd, set up to manage the health claims of public sector general insurers, will begin operations in September. With this, 10-12 per cent of the claims handled by external third party administrators (TPAs) are expected to move to the new body, helping reduce the turnaround time.
In the initial phase after the launch of operations, the shifting of business from the public sector insurers would be gradual, said an official with Health Insurance TPA.
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“There were some concerns expressed that since the company is owned by insurers, there could be widespread rejection of claims. But this is not true. Also, claims may even be paid faster since they will be handled internally,” said a senior company executive.
When a health insurance claim is filed, the TPA comes into the picture. It assesses the claim and presents a report to the insurer, which accepts or rejects it.
The Health Insurance TPA of India will provide the services of call centres, customer service and grievance management, pre-authorisation, and claim processing. It would be involved in providing network empanelment, verification and investigation and pre-policy health check-up. The firm would also provide services to support all types of health insurance policies – individual, family floater, group covers, mass schemes, indemnity, fixed benefit, among others.
The internal TPA was set up to prohibit large-scale leakages while settling insurance claims in the health segment. Insurers expect the new body to speed up the claims settlement process and reduce the claims ratio of insurance firms. This move is also expected to reduce costs for insurers, who pay a commission to TPAs to settle claims.
The company has got a licence from the Insurance Regulatory and Development Authority of India (Irdai) to function as TPA and is now running trials. TPA licences are valid for three years from the date of issue or renewal.
The new TPA had earlier run into trouble after the Competition Commission of India (CCI) ordered an investigation against General Insurers' (Public Sector) Association of India and other public sector general insurers for alleged anti- competitive practices. The CCI had observed the Opposite Parties have floated in-house TPAs to reduce their claim ratio, which could potentially result into rejection of claims on ad-hoc basis. The CCI found this practice not in alignment with prevailing global practices, where the TPAs and insurers are operating independently.
According to officials involved in setting up the Health Insurance TPA of India, the company would compete with other TPAs in the market.
“At no point will the business for them be 100 per cent. We will continue to keep a healthy mix between the external TPAs and in-house TPA,” said a senior official.
Health Insurance TPA of India Ltd is a joint venture of public sector non-life insurance companies – National Insurance Company, New India Assurance Company, United Insurance Company, Oriental Insurance Company, and General Insurance Corporation of India. The first four have 23.75 per cent stake each and GIC has five per cent.
The TPA has been formed with an authorised capital of Rs 300 crore and paid-up capital of Rs 10 crore. M Nagaraja Sarma is the managing director and CEO.
