Insurers, TPAs On Uncertain Path To Healthier Bottomlines

New Delhi, May 30: | Updated: May 31 2002, 05:30am hrs
The admission of third party administrators (TPAs) into the elite circle of licence-holders duly vetted by the Insurance Regulatory and Development Authority (Irda) does not seem to herald a new era for policy-holders, at least not yet. That is because of an imminent face-off as insurers and intermediaries meet on new terms in a regulated environment.

Not just that, the new entrants into the field of TPAs may have a tough time holding their own against those already entrenched in the business, having serviced the public sector and its corporate clients in the erstwhile unregulated market.

They would also have to slug it out in a murky environment where insurance personnel actively connive with policy-holders and healthcare providers to fleece the insurer through inflated hospital bills and even fictitious death claims. Very little exists by way of physical checks and balances, some new players have asserted.

Indeed, progressively higher claim ratios in the medical insurance segment have been affecting the health of non-life public sector insurers, and prevented new private players from entering the arena in a big way.

There is also some confusion amongst the TPAs on the jurisdiction of General Insurance (Public Sector) Association (Gipsa), which has called for technical and commercial bids from all licensed TPAs for empanelment. TPAs, though, charge that it may be more to stay out of the CAGs way that they may agree on uniform TPA rates.

The bids were to close on Friday, but with Irda issuing another five licences recently in addition to 14 issued in March, the tenders will now close on June 5 and the bids opened later in the day.

Interestingly, insurance chiefs admit that its decisions would not be binding and that the companies could enter into independent deals nevertheless. At least two of them have entered into some arrangements with TPAs already on the insistence of their corporate clients.

Those who qualify in Gipsas technical round would then be eligible for the financial bids round, officials in an insurance PSU said. Gipsa has stipulated that a bidder have at least one years experience; a medical practitioner on its permanent rolls; a presence in each state capital of the zone it bids for and at least in one more location in that state; a tie-up with at least five hospitals in each state capital of the zone and two in another location elsewhere in the state; a hotline in each office and at least one toll-free number; at least one claims administrator in each office, etc.

TPAs feel that the criteria of prior experience would straightaway disqualify those setting up operations now. Moreover, they alleged that the older TPAs may edge them out by offering unrealistically low service charges, since they have established businesses. They said the competition ought to be more on quality and speed of service. New player Universal Medi-Aid Services, for instance, has tied up with 156 hospitals country-wide and has bid for all four zones, CEO G P Sureka asserted. However, it has no experience except that one of its promoters was a doctor with considerable experience in medical insurance cases.

Gopal Verma, managing director of E Meditek Solutions - a TPA in operation for about two years now has tied up with some new players as well, but feels that as of now neither the public sector nor private companies were clear on how to proceed on improving the claims experience.

The air will maybe clear up a bit after the pre-bid consultations on June 4 and the post-tender clarificatory discussions a week later. TPAs, however, fear it would be a long haul.