July 13, 2010

Insurance cos slash list of hospitals for making fraudulent claims

There’s bad news for public sector health insurance policy holders who hitherto had a wide range of hospitals offering cashless benefits to choose from. Following the unearthing of several instances of allegedly fake claims made by hospitals in collusion with patients and third-party administrators (TPAs), public health insurance companies have drastically cut down the list of hospitals in Mumbai, Delhi, Chennai and Bangalore.

Top city hospitals which are off the list include Cumbala Hill Hospital, Breach Candy, Bhatia Hospital, Lilavati, Hinduja and Jupiter. However, some of these hospitals have voluntarily opted out on the grounds that the new rates fixed by the insurance agencies are too low. The agencies are still negotiating with Bombay Hospital and Jaslok.

Several hospitals are still in the dark about the curtailed list, as they have not been informed either by the TPAs (who settle claims on behalf of insurance companies) or the companies themselves. "I am not aware of our hospital being taken off the list of public sector health insurance companies," said Vijay Krishna, CEO, Breach Candy Hospital. "But our agreement is with the TPAs, not with the companies. I will discuss this with the TPAs to know more about this issue." Dr Sujit Chatterjee of L H Hiranandani Hospital also said he had heard nothing officially about this exercise. An official from an insurance firm said the hospitals would soon be informed.

Sources said the public sector insurance firms, which have an 80% market share in this segment, collected premiums worth Rs 900 crore per annum from Mumbai region. "As against this, they had to shell out Rs 1,200 crore annually towards claims — a loss of Rs 300 crore per year," said the source. Alarmed at the trend, New India Assurance Company decided to undertake an exercise to cut down the mounting losses incurred on account of fake claims. Oriental Insurance Company, National Insurance Company and United India Insurance company also decided to lend their support to this exercise, which was carried out by MD India Health Care services. The General Insurance Public Sector Association, the parent body of government-owned health insurance firms, then decided to take these corrective measures.

"There were over 800 hospitals providing cashless benefits to patients insured by public health insurance companies in Mumbai," said Dr Mohammed Mukhtar, health strategist and manager, MD India Health Care Services. "Most of the hospitals were inflating the bills submitted to insurance firms. Apart from blacklisted hospitals, the insurance firms decided to exclude hospitals which don’t have adequate infrastructure from the Preferred Provider Network."

Link: Original Article

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