IRDA moves to protect individuals from being fleeced by hospitals

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Insurance regulator plans to assign unique grades to hospitals accross the country based on their cost of services and treatment. Insurance regulator plans to assign unique grades to hospitals accross the country based on their cost of services and treatment.
SummaryInsurance regulator plans to assign unique grades to hospitals accross the country based on their cost of services and treatment.

For those who have paid through their nose for medical treatments, for those who are unnerved by the arbitrary cost of healthcare, and for those who are baffled by more-business-less-service approach of hospitals, the insurance regulator seems to have a remedy.

Recently, the Insurance Regulatory and Development Authority (IRDA) announced that it will map hospitals across the country by providing them with unique identity numbers and collect information on the cost they charge for different treatments. The move, which is still at an initial phase, may ultimately lead towards drawing down rules and framework for hospitals, thereby making the cost of medical treatment transparent and consumer friendly.

“We are working with national accreditation agencies to uniquely identify hospitals, which will involve giving them identity numbers that will be integrated with the pin code of the area and the name of hospitals,” said TS Vijayan, in Mumbai last week.

“The next step will be to see what these hospitals charge patients for various treatments.”

The insurance regulator informed that it has already started work on the same and is collecting transactional data for health insurers to know the charges by various hospitals for a particular disease. Even the Insurance Information Bureau is compiling data to provide unique identity numbers to hospitals.

Insurers see this as the beginning of a big change in the way healthcare and health insurance industry could operate in the future. There is no database on hospitals as of now.

“It is a very positive step to have all hospitals numbered. It is the first step towards creating a database with a unique identity number,” said Kaushal K Mishra, chief executive officer, Tata AIG General Insurance adding that the whole process may take some time.

The bureau has already collected data from around 30,000 hospitals which would help streamline prices apart from curbing fraudulent billing.

What will be the model?

While the plan is still at the drawing board, insurers and Third Party Administrators (TPAs) clearly feel that it is one thing that is critically needed in the country.

Industry experts say that the first thing required to be done is to categorise hospitals and grade them according to treatments and services they offer. Once the grading process is completed, hospitals should be made to agree on a standard charge within their grade for a particular treatment.

“This in itself will be a big revolution as today the hospitals charge arbitrarily and there is no regulation on what they

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