Health Insurance Guidelines by IRDA

Health Insurance policy has become one of the most dynamic verticals of the Insurance Industry. Even though the claim ratio has been decently high, the insurance industry has shown significant improvements in its operational factors. However, the efficiency, affordability and accessibility of health insurance are amongst the numerous challenges sustaining the growth of this industry. A sense of mistrust has developed between the insured and the insurer because of non-standard practices resulting in inefficiency of the health insurance system. Hence, Standardization is very crucial in enhancing the quality of health insurance, boost innovation and penetrate health insurance deeper into the country.

IRDA – Health Insurance Guidelines 2014:
In its recent guidelines (2014), IRDA has notified that the health insurance processes and practices be made uniform across the country. The main purpose behind this guideline is that IRDA believes – standardization of processes will provide a clear picture to all, encouraging the stakeholders to provide better services and allow a healthy interaction between the customer and the insurer/third party admin/etc.

The Guidelines also Include Different Aspects of Standardization–

• Standard Billing formats
• Definitions of critical illnesses
• Discharge summary formats and
• List of excluded items in hospitalization indemnity policies

There is no question that this step by IRDA will be an important benchmark in ensuring standardization in the health insurance sector.

Let’s look at these aspects one at a time:

Definitions of Critical Illnesses-
The guideline given by IRDA aims at reducing the ambiguity that exists between the provider, insurer/reinsurer and the consumer, due to differences in critical illness definitions. Different definitions of Critical Illnesses laid out by different health insurance companies have created confusion in the minds of the customers. The customers usually find it difficult to compare critical illness insurance products due to this difference in definition. Also the insurers and reinsurers remain baffled when deciding on the lump sum amount of critical illness treatments. Standardizing the critical illness definitions will bring clarity and uniformity in product evaluating process.

List of Excluded Items-
Another area of concern is the exclusion list. The exclusion list has been unclear and also differed from provider to provider. As a result, many a times it has been observed that claims filed by policyholders or hospitals are accepted by the insurers but challenged by claimants. This has been, thus, a major cause of dispute between the insurance companies and healthcare providers and drags the customers in a state of inconvenience as their expenses rise. Hence, an acceptance of a common exclusion list of the insurance companies and the healthcare providers with a clear understanding of all the clauses is essential to facilitate faster roll outs of health insurance in India.

Standard Bill Formats-
Mapping the hospital bills with the specific requirements of the health insurance companies is crucial in an attempt to make the claim process faster and tidier. Facilitating electronic transfer of bills will help reduce the delivery time. As per IRDA guidelines, the contract between insurers and providers will now include standard bill formats.

Standard Discharge Summary Formats-
Discharge summary formats also to be standardized to lessen the delay in claim processing. Often the discharge summary format sent across by the providers lacks mandatory data and the payers need to re-contact the providers to fetch data. The providers will now have at hand a standard format for discharge summary which will benefit the parties at stake and lead to faster claim processing.