Tuesday, July 13, 2010

GIPSA

what is the necessity of GIPSA PPN , (Preferred Provider Network)

What Made General Insurance-public Sector Association Company to have PPN

In India we have health Insurance since 25year it high time to have maturity over the tariff and Selection of Network, and this practice is there country European, country , Middle east Asia, east Asian , other part of the world in US Health , recently US passed reform in health Insurance sector even , we India similar step from the government of India similar project

this is the starting of the revolution in Health Insurance and Hospital Industry it is just small step taken ,

as per till today there is no standardization in the network or any line of treatment and length of stay

AS per market in four Different region Mumbai, Delhi, Bangalore , Chennai.

As Per Market Study , Many Hospital Work on the CGHS rate In Delhi, almost 40% of the Hospital work on the CGHS rate, many Corporate Hospital Any Work on the CGHS rate for the selective surgical Procedure Same Follow in Bangalore and then Chennai,

In Mumbai only 4 Hospital work on the CGHS rate only ,

Chennai Market Survey , Hospital say high charges for Insurance patient, Patient and consultant have agreement before surgery, patient get the consultant , hospital say the they don't have control over consultant ,

Bangalore health Market is more discipline then other three metro, even fraud are less , opportunistic inflation of bill is there ,

Mumbai market total different market , even single Specialty Corporate Hospital Depend on the General Practitioner to Feed the patient and Cut is 15- 30% of Bills goes referring General Physician, Fraud Are more in the market ,
consultant Driven Market ,

In recent a Hospital South Mumbai hike the Surgeon charges from 15 % to 305 %
at any given point so much Hike is not acceptable in the market,
even as commercial point , no one can take so much hike in product , but still some TPA'S gladly following the the tariff, because there are least brother to raise the issue of increase in hike of tariff of hospital , but it effect the every common citizen of Mumbai, today one will follow , similar trend will follow other hospital.


In India we don' have working Regulatory Body of Hospital , we need to have , we need have such body

I thanks New India Assurance for starting the Implementation well support by the oriental Insurance , United India , And National Insurance

i also congratulate the core TPA , MDIndia , Raksha, TTK, MediAssist TPA, and all other core who have support this exercise


TPA do not have contract binding rates (treatment-wise) with Hospitals in their network. Globally, TPAs contract treatment-wise rates with each Hospital in their network. Treatment wise fixed rates would remove the disparities and anomalies that Hospitals currently enjoy. The core of the issue is TPAs lack negotiation power with Hospitals.

Why do TPAs lack negotiating power?

In India, more than 70% of the total hospital billing is still out-of-pocket and not through Insurance Companies or TPAs. Hospitals are overflowing with patients and therefore don’t depend on TPAs for their revenues. (Imagine a 100 employee TPA bidding to negotiate with a Hinduja, Apollo, Fortis or an Escorts?)

1). Insurance Companies under demands from Large Corporate Customers to list a large hospital, unconditionally pressure, TPAs to include certain hospitals into their network, without rates.

2). Add to this, TPAs are also under pressure to have a large and geographically wide list of close to 3500-4000 hospitals under their network. Due to such a large spread of hospital payments in the network, they cannot guarantee revenue to hospitals, which is the trump card for Health Claims Administrators worldwide.

3). Every division of a Government Insurance Company in a bid to offer the option of a TPA to large customers, use services of 6-8 TPAs. Customers are therefore spread across larger no. of TPAs.

4). Customers (especially Corporate/Group) want to decide their hospital. TPAs currently don’t take the healthcare responsibility of recommending hospitals. Hospitals therefore get 'business' on the decision of the consumer and not the administrator.

Delayed payments to Hospitals:

This is the justification each hospital will give. Insurance Companies (mostly Govt. and some Private) due to their internal deep rooted inefficiencies have been guilty of delaying payments to TPAs. TPAs being small sized companies depend on funding from Insurance companies and therefore in turn delay payments of the Hospitals. Some Hospitals in need of liquid cash, have been known to discount their authorized cashless claims with Banks and Financial Institutions, ofcourse at a cost. Every Hospital would be ready to reduce their costs if they are committed to payments in say, 30 days.

Recently a new Insurance company has been sucessful in negotiating better rates with Hospitals on the contracted committments to pay on time, with interest penalties

recommended Solution pay with authorization for planned surgeries .

Lack of Uniform Grading:

There is no regulating apex body or uniform grading of hospitals in India, which makes contracting of rates with Hospitals all the more subjective and unscientific. Rates charges are merely based on location and popularity and not on the quality and consistency of the care and treatment.

Recommended Solution:

Apart from the recent kneejerk delisting/reduction in number of hospitals (to ones which agree to contracted rates), by Insurance companies, here are some solutions our experts recommend.

1). Health Insuracne premiums have grown by 10 times in 5 years. Insurance companies should work towards increasing their negotiating capabilities with Hospitals, by bringing revenue dynamics into picture.

2). Govt. Insurance Companies should reduce the fragmented way in which it engages TPAs. This will bring more business to lesser no. of TPAs, and hence bring administrative and financial control on claims.

3). Insurance Companies should lobby with the Central Government and Ministy of Health and Welfare to bring in an apex body which enables self regulation and grading of Hospitals and other Healthcare providers.

4). Selection of Hospital Network should be based on quality of Healthcare. Like the "goalkeeper model" in the west, TPAs should be empowered to take responsibility of healthcare beyond negotiation of rates. They should be in a position to recommend the healthcare provider to the customer.

5).PSU Companies and TPAs should take into account demography and economics and scientifically fix a schedule of treatment-wise limits for cashless claims, in its policy condition.This way, Insurance Companies or TPAs would pay upto the limit and leave negotiation of the amount charged over the limit to the Customer.



Insurance companies have been witnessing inflated, fraudulent & unwarranted hospitalizations claims when the patient had declared that he/she has insurance cover & wishes to go for cashless treatment. Also, an analysis of cashless claims brought out pointer that 80% hospitalizations (by amount) happen in only 25-30% hospitals. The advantages of curtailed list are envisaged as follows:
1). Limited hospital list (around 350 Bangalore, Delhi, Chennai, & Mumbai ) would offer better administrative control.

2). TPAs can drive more business to small number of hospitals & hence, can demand volume discounts.

3). With better administrative control, all bad claims (fraudulent, inflated & unwarranted) can be reduced to a greater extent.
Methodology adopted
New India Assurance Company (it’s the largest, has major Health Insurance exposure and their current CMD has good rapport with other PSU Insurers’ CMDs) had taken the lead & appointed four of its empanelled TPAs as nodal TPAs (one for each region i.e. East, West, South & North) & asked them to draw a list of around 100-125 hospitals in each region. Only these PPN (Preferred Provider Network) hospitals would qualify for cashless treatment. PPN is a very common concept in west & helps insurer have better control over claims without compromising the quality of care.

. Currently this does impact corporate members as this arrangement is meant for only retail /individual policy However, looking at the success of this arrangement, soon, this may get extended to corporate policy-holders too. New India, Oriental Insurance & United India, National have agreed for following this network.
1). Cashless treatment becomes very useful when the treatment is costly. tertiary care hospitals in major cities being part of this Preferred Provider Network, members would be not forced to raise the funds for cost of treatment before the treatment starts.

2). Cashless treatment has been one of the major attractions which has helped increased Mediclaim penetration in Urban & Semi-Urban India. With these kind of restrictions, the new policy sales may suffer an impact which is detrimental to overall claims experience. (New policies sale brings in premium without any claims in its initial years which help insurance companies improve their claims ratio.)

3). There is proper methodology has been adopted for selection of these hospitals & many network hospitals are in dark about this change. With bench-marking, the quality of care will not deteriorate & just for want of cashless, members may have to face inefficient service levels.
1. 1). A right mix of Tertiary, Secondary & Primary care hospitals has ensured while finalizing the city-wise Preferred Provider Network.
2. 2). A stringent & transparent criterion are adopted for selection of hospitals at following features:
a). No. of Beds
b). Infrastructure & Manpower quality
c). Certifications & Statutory Compliances like minimum wages, PF etc.
d). Published rates for various treatment & acceptance of Insurance Tariffs
3. Pervious history of Hospital behavior is taken,
4. 3). A formal Third party annual audit & review methodology should be decided by the insurance company for these PPN hospitals.
5. 4). In case of occurrence of fraudulent practices, the hospital should be banned for a period of three years and even reimbursement at such hospitals should not be allowed.
hough the initiative taken up by insurers has shaken up the hospital industry & made the consumers anxious, we have reasons to believe that this is a start of much needed changes in the Health Insurance industry. What we expect is well thought-out strategy derived out of data available with the insurers & then an efficient implementation of the same in phased manner to ensure that the consumer is not hassled unnecessarily.

According to M Ramadoss, chairman & managing director of The New India Assurance Co Ltd, “Insurance companies have been witnessing inflated, fraudulent, and unwarranted hospitalisation claims when the patient had declared that he/she has insurance cover and wishes to go for cashless treatment. Due to this, insurer-funded healthcare cost is more than individual funded cost. The reverse is true in developed countries.”

Over the past few weeks, the healthcare industry has been in turmoil after cashless facility was revoked all of a sudden from leading hospitals. PPN (Preferred Provider Network) is a network of providers who agree to negotiated rates on specified procedures. New India Assurance has restricted cashless facility to hospitals in PPN. The concept of PPN is widely present in the US to ensure that insured funded healthcare cost is less than individual funded cost.

PPN will include hospitals who agree on standard rates for procedures/treatments. According to Mr Ramadoss, “We have 380 hospitals who have agreed to be part of our PPN. Ideally, we want as many hospitals on board as possible. The rates could vary from hospital to hospital based on location, facilities, equipments, etc. It is not one-size-fits-all. If there is an industry standard for standard rates, we will welcome it. Due to the absence of it, I have to step in but not to rob hospitals of their profits. We are trying to benchmark average costs of the previous two-three years and using recommendations of doctors on panels to come up with frozen standard rates for procedure and treatments.”

The disadvantage for New India Assurance policyholders is the need to raise money if they wish to go to hospitals outside of the PPN. According to Mr Ramadoss, “Out of 100 policies, 8% make claims of which 35% is cashless. It means only 2.8% of claims we get are cashless. It is not (a) great disservice. Unlike in the US, the supply constraint is present in India for quality healthcare. We are trying to bring as many hospitals on board (the) PPN. If the patient is unable to go to a PPN hospital, the reimbursement will still happen after the claim is submitted.”

A ‘limited hospital list’ (around 450 all over India) would offer better administrative control. TPAs can drive more business to lesser number of hospitals and hence, can demand volume discounts. With better administrative control, all bad claims (fraudulent, inflated and unwarranted) can be reduced to a greater extent.

The success of PPN really depends on hospitals agreeing to be part of the network. While the Association of Medical Consultants (AMC) is already thinking of completely boycotting the programme, several hospitals on PPN may also opt out soon. The hospitals on the PPN have been given a fixed tariff rate card by government-owned insurance companies for more than 40 different surgeries. The rates, say industry insiders, are 50% less that what they charged earlier at bigger hospitals. In smaller hospitals and nursing homes the rates have been slashed up to 30%, upsetting healthcare providers. It is a trade-off between volumes of business versus standard rates for a hospital. There will be resistance to anything new and so the same is expected for PPN.

There are definitely winds of change blowing in the healthcare industry, which is bleeding under losses. New India Assurance itself is running losses of 20%—excluding administrative costs — for health insurance. The losses are over 40% when administrative and other costs are included. The loss scenario is present for the other three public sector insurers too. The initiative taken up by insurers has shaken up the hospital industry and made consumers anxious. We have reasons to believe that this is a start of some much-needed changes in the health insurance industry even though it may cause inconvenience to consumers in the short term. Lack of supply of quality healthcare in India is also one of the reasons which make it even more important for good hospitals to come on board PPN to make it successful.

The insurance regulator Irda is likely to meet on Tuesday the heads of insurance companies to discuss issues related to the proposed initial public offer (IPO) guidelines.

"There could be some discussions on the IPO guidelines on the July 20 informal meeting with Irda chairman," Life Insurance Council general secretary SB Mathur told PTI.

Finance Minister Pranab Mukherjee will be going to Hyderabad on the occasion of opening of the Irda grievance redressal cell. The chiefs of both life and non-life companies will be coming and there will be some discussions, he said.

Last week, Irda chairman J Harinarayan had said, "We are expecting the (IPO) guidelines shortly. We have given our observations. The matter is currently with the Securities and Exchange Board of India (SEBI)."

He had said the valuation norms for the companies have been finalised in consultation with the Institute of Actuaries.

As per the present regulation, insurer can come out with IPO after completion of 10 years of operation. The companies now want it to be relaxed so that this capital intensive sector can tap primary market to meet fund requirements.

There are 46 insurance companies operating in the country including 23 life insurers.

The Grievance Redressal Cell of the IRDA would look into the relevant and valid complaints lodged by policyholders. The complaints against life and non-life (general) insurance companies are handled separately. The Grievance Redressal Cell plays a facilitative role by taking up complaints or customer grievances with the respective insurers.

At the same time, the meeting could also deliberate on third party premium rate, which is uniform across the sector.

"We will discuss the issue of Third Party Premium Rates. The rates, at present, are under tariff and all the companies have asked for a revision. We will be talking to the IRDA chairman on that," said New Indian Assurance Chairman and Managing Director M Ramadoss.

In the last few years, third party claims have gone up significantly resulting in losses under motor insurance segment. As the third party premium is fixed, insurers are asking for increasing it to mitigate their losses.

On the issue of delisting of a few major hospitals from cashless mediclaim facility, Ramadoss said, "If there is any issue raised, we will answer that."

From July 1, public sector general insurers delisted about 150 hospitals from the list of Preferred Provider Network (PPN) that provide cashless hospitalisation services to policy holders under the mediclaim scheme.

The four insurance companies -- New India Assurance, United India Insurance, National Insurance and Oriental Insurance -- stopped providing cashless facility in select hospitals.


Gipsa company to call JV to start it own tpa really good move ,

As the Past experience some of the had minted enough money act as tpa agent to settled way of mean to happy the corporate client rather than judge the claims of their merit, Some of tpa as CDS Unit ( Cheque Distributing Services) Unit for the Corporate By Hook or crook and blaming the ICR for the Underwriting claims

Some of TPA had made hospital big fool state that they will Under Corporates PPN List , Take additional Amount from the Hospital to their Panel for that particular Corporate

One point in my view GIPSA should Buy any excising tpa for its merger to new jv , then it again old wine in new bottle it act as nuisance to its own


9 comments:

  1. Hoplessly biased in favour of a nexus between select group of hospitals and TPA.A nexus, which in name of PPN, IS CREATING A CARTEL.

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  2. can we change TPA midst of the policy?

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  3. www.Ekohealth.in has won social impact awards to make patients aware on the GP cut practice and unethical practices. It helps patient negotiate surgery rates, generic medicines and gets discounts at pharmacy, hospitals, dental, labs and hospitals.

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  4. hi mai anjani kumar pandey from baroda gujarat. aur muje casles servise chalu kar vani hi mere hospital me? muje kay kar na hoga ?

    pls help me and my mail id is anjani.pandey53@yahoo.com

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  5. who says under GIPSA the rates have gone down?
    few hospitals are forced to charge more under GIPSA
    their regular price are cheaper than GIPSA
    is GIPSA really a cost saver?????

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  6. compared to Private Insurers,GIPRA rates are fine.Their customer service is also very good

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  7. It is to be read as GIPSA. GIPSA rates and service is far better than private insurers.

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