NIAC’s actions follow spiraling of insurance claims, from Rs 1.6 crore per day in December 2017 when the second phase of the scheme began, to Rs 3.7 crore in May 2018 (see graphic).
New India Assurance Company (NIAC), the insurer in Rajasthan’s Bhamashah health insurance scheme, de-empanelled 66 hospitals it suspected of making fraudulent claims, but within a few hours of this, the state government overruled it. In a mail to NIAC’s branch head in Jaipur, the joint CEO of the Rajasthan State Health Assurance Agency (RSHAA) said the de-empanelment was “completely unilateral, arbitrary, mala fide and in clear violation of the provisions of the … agreement” between NIAC and the government.
NIAC’s actions follow spiraling of insurance claims, from Rs 1.6 crore per day in December 2017 when the second phase of the scheme began, to Rs 3.7 crore in May 2018 (see graphic). Over this period, NIAC has been regularly rejecting claims from those hospitals where it felt the claims were fraudulent.
When the scheme was first begun in 2015, the premium was Rs 370 per family, but due to very high claims, NIAC raised the premium to Rs 1,263 for the second phase in 2017 — from 90% in 2015-16, the claims ratios rose to a staggering 176% in 2016-17 under the first phase of the scheme.
In a reply to this newspaper, the managing director of Rajasthan’s National Rural Health Mission confirmed the de-empanelment and its cancellation, saying “the insurance company did not give any opportunity of hearing to these hospitals” and added that, after its intervention, NIAC is hearing the hospital’s views.
The dispute stems from the fact that while the Rajasthan government feels the “clauses related to de-empanelment can be invoked by none other than RSHAA” — to quote from the RSHAA mail cancelling NIAC’s de-empanelment — the insurance company seems to be relying on Clause 1.25.10 of the agreement that says “De-empanelment is a separate clause and Insurer may initiate the process of de-empanelment irrespective of penalty clause for the hospitals”.
While cancelling the de-empanelment, the Rajasthan government has said the hospitals shall continue to work as before and till it is satisfied there is a fraud, “all claims submitted by the hospitals shall be honored and shall NOT be rejected on this ground”.
As for the insurance company’s interpretation of its contract, the RSHAA mail terms it “mala-fide misinterpretation of the clauses numbered 1.25.9 and 1.25.10 of (agreement) aimed at bringing down the number and amount of claims to wrongly benefit the insurance company”.