One size fits all

Irda's latest exposure draft, which calls for greater standardisation, has sought to remove ambiguity in settlement of health insurance claims

To standardise health insurance products, the insurance regulator has come out with an exposure draft to set standard definitions of terminology, procedures for critical illness, pre-authorisation and claims form and even standard excluded expenses in hospitalisation indemnity policies.

There will be standard file-and-use application form, database sheet and customer information sheet and even standard agreement between third-party administrators (TPA), insurers, provider and insurer.

The Insurance Regulatory and Development Authority (Irda) has said that standard terms would reduce ambiguity and enable all stakeholders to provide better services and enable customers to interact more effectively with insurers, TPA and the providers.

A common industry wide pre-authorisation and claim form will significantly streamline processes at all stages and will enhance the ability of providers to obtain a timely prior authorisation. Moreover, the data will have to be presented in an optical character format, which will go directly into the IT system and reduce the data entry issues for TPAs and the insurers.

All procedure related to processing of claim will be handled by the TPA regional offices and any intimation of claim and receipt of claim papers by the respective underwriting office of the insurance company will be forwarded to the regional processing office of the TPA. On its part, the TPA will process the claim and facilitate the insurer to take decision on claim settlement or rejection. Insurers will only have the right to settle or repudiate a claim and the TPA can only convey the repudiation of a claim to the insured.

As a norm, if the TPA sends the letter of repudiation to the claimant, it will have to be clearly indicated in the letter that "the claim has been repudiated as advised by the insurer" and the specific reasons thereof. The repudiation letter will also clearly mention that the insured may approach the grievance cell of the insurer if he is not satisfied by the settlement. Contact details of the grievance cell will have to be provided in the letter.

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One size fits all