IRDA appoints committee for TPAs
Wednesday 31, December, 2008 MUMBAI: The Insurance Regulatory and Development Authority has appointed a committee headed by former LIC chaiman SB Mathur to look into the
working of third-party administrators (TPAs).
Among other things the committee is likely to prescribe the maximum time limit for various services.
"Health insurance is the fastest growing segment in the industry and more than half of the claims are now settled through the cashless route" said Mr Mathur.
He added that the committee would relook the whole system with the objective of having standard best practices.
Third-party administrators are appointed by insurance companies to provide cashless service to health insurance policyholders. TPA facilitate cashless service by entering into an agreement with a network of hospitals across the country.
As of March '08 there were 28 TPAs in operation with the top three- Family Health Plan, Paramount Health Sercvies and TTK Healhcare having over 50% market share.
Ever since cashless mediclaim was introduced less than a decade ago the concept has caught on because of the convenience to the policyholder despite friction between insurers, TPAs and hospitals.
The present guidelines on TPAs date back to 2001 when the TPAs were still at a nascent stage of activity. According to Mr Mathur the TPAs have facilitated the availability of data on health insurance claims.
The 12 member panel includes representatives from private and public non-life insurers, health insures, TPAs, consumer representatives and representatives from hospital chains.
The committee's terms of reference include re-examining the role of the TPAs in the current health market scenario and to make suitable recommendation clarifying their utility to the future growth of the health insurance industry.
The penal will also devise customer service benchmarks for TPAs which will include Turn around Time for ID cards and claim settlement and maximum time lines for different processes.
There will also be a minimum skill sets prescribed for the TPA personnel, including training in ICD 10 coding, claim and preauthorisation processing.
According to KPMG the private health insurance industry has been growing at a rate of 37% since `02 and currently stands at Rs 5125cr. The industry is expected to continue growing at compounded growth rate of 25-30%.
The consultancy firm in a recent report said that non-life insurers are realising that by using a TPA for admission and settlement of claims, they have in fact outsourced their most important activity. "As a result some insurance companies have either established or are intending to establish their own in-house claims operations" the report said.
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