Health Insurance TPA to begin operations only by 2014 end
07 Feb, 2014 01:01 PM
So, loss ratios will remain high.

Health Insurance TPA of India, the common in-house Third Party Administrator (TPA) of public sector general insurers, will be fully operationalised only by November. Hence, the loss ratios in the health portfolio are expected to continue.

Health Insurance TPA of India was incorporated in August 2013 to handle health insurance claims of the state-owned insurers. These claims are now handled by external TPAs.

This common TPA to process health claims has National Insurance Company, New India Assurance Company, United Insurance Company, Oriental Insurance Company and General Insurance Corporation of India as stakeholders. While the first four have 23.75% stake each, GIC has 5%.

Health Insurance TPA is headquartered in New Delhi and shall develop its footprints/branches in different cities in due course. Its key objective is to enhance customer experience and to bring in greater efficiency in health insurance claims management.

“We are in the process of putting all the software and IT systems in place. The TPA would begin doing business with public general insurers in the next six to nine months,” said a senior official from Health Insurance TPA of India.

Subject to regulatory approvals, Health Insurance TPA shall provide end to end ‘Health Services’. This would include member enrolment, call centre, customer service and grievance management, pre-authorisation and claims processing. Further, it would also be involved in provider network empanelment, verification and investigation, pre-policy health check-up and facilitate customer awareness and wellness programmes.

Health insurance loss ratios range from 95 to 100% depending on the size of the company. Loss ratios refer to the ratio between premiums collected and claims paid. However, with stiff competition in group health portfolio with aggressive discounts given to retain customers, the losses have been on the rise.

An external TPA handling claims will add to the costs, hence public general insurers went in for a common TPA. However, till it is operationalised, losses are expected to continue.

The company shall provide services to support all types of health insurance policies sold by insurance companies in India. This includes individual, family floater, group covers, mass schemes, indemnity, fixed benefit among others. The common TPA has been proposed to prohibit large-scale leakages while settling insurance claims in the health segment.

Those in the sector said this common TPA was expected to speed up the claim-settlement process, as well as reduce the claims ratio of insurance companies. This move is expected to reduce costs for these insurance companies, which pay a commission of approximately 6% of premiums to TPAs to settle claims.

P K Bhagat has been appointed the first managing director and chief executive officer of Health Insurance TPA (third-party administrator) of India for a period of two years or till the time he attains superannuation.

When the TPA comes into operation, the claims handling and processing from external agencies will gradually be transferred to the new entity. Health Insurance TPA of India has been formed with an authorised capital of Rs 300 crore and paid-up capital of Rs 10 crore.
Source : Business Standard

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