Non-life insurers have received around 1000 novel Corona Virus Disease (COVID-19) claims till May 4, 2020, with the aggregate claim amount being close Rs 20 crore, as per insurance industry estimates. Though the average claim amount works out to nearly Rs 2 lakh, insurers have observed wide variations too.
“Some claims are in the region of Rs 2-3 lakh, while in some cases, the hospitalisation bill is as high as Rs 12 lakh,” said a senior executive at a private general insurance company who spoke on the condition of anonymity.
Making sense of claims data
Insurers have now started collecting claims data to understand the trends and identify unreasonable charges, if any. COVID-19 claims have started trickling in for the industry after the central government allowed private hospitals to treat patients from March 25. “We are submitting our data regularly to the General Insurance Council. The process is still work-in-progress. We plan to study the patterns and use the insights to monitor anomalies in charges, if any, that result in inflated hospitalisation bills,” said a senior industry official.
Non-life insurers are trying to evolve some uniformity for COVID-19-related hospitalisation expenses. “A consensus is being worked out on what constitutes reasonable expenses. For instance, the usage of multiple masks and gloves. Everyone who comes in contact with the patient – doctors, nurses, ward boys and so on – has to wear masks and gloves. They have to be discarded at least once in eight hours. We hope clarity will emerge soon,” said Nayan Shah, Managing Director, Paramount Healthcare, a third-party administrator. The industry’s exercise will attempt to determine expenses that are admissible and the ones that qualify as exclusions. “For example, in a case in Pune, the cost of PPE kits mentioned in the hospitalisation bill was around Rs 80,000. The insurer refused to pay. As TPAs, we depend on insurers’ calls. We have had meetings with insurers to work out a solution,” said Shah.
The key reasons for the huge gap include co-morbidities (that is, pre-existing ailments), need for isolated wards, ventilators and PPEs. “Choice of hospitals and rooms, type of care being given, as also deductibles and co-pay in a policy will have a bearing on the claim payable,” says Sanjay Datta, Chief, Underwriting, Claims and Reinsurance, ICICI Lombard. Hospitalisation charges such doctor’s fees, operation theatre charges, anaesthetist’s charges are linked to the room category chosen. So, you will not only have to shell out higher room rent if you were to choose a premium room over a standard one, but other charges, too, will be proportionately higher.
“Hospitalisation expenses would be also higher if the patient is suffering from, say, diabetes and asthma, along with COVID-19. So, those conditions have to be managed as well. The cost of anti-retroviral drugs administered is also high,” said Kapil Mehta, Co-founder and CEO, Securenow.in. Specialised treatment and newer requirements that the contagious disease warrants mean that it is difficult to arrive at a standardised treatment package in a short span of time.
Lack of uniformity in charges
A section of the industry believes that the lack of standardisation in charges is giving rise to inflated hospitalisation bills. “We do not have any jurisdiction over the hospitals and neither does the Insurance Regulatory and Development Authority of India (IRDAI), as it does not regulate hospitals. But we are in the process of collating the COVID-19 claim data to ascertain how reasonable the charges are. It will be submitted to IRDAI through the GI Council. We hope the regulator will be able to take it forward with the government authorities concerned,” said the private insurance executive quoted earlier.
Acting on complaints that private hospitals are overcharging COVID-19 patients, the Maharashtra government issued a directive capping charges. “The government will now provide insurance cover to all state residents. The capped tariffs will be aligned to GIPSA PPN packages and applicable to hospitals across the state, including private ones,” said Shah. General Insurance Public Sector Association (GIPSA) is an industry body comprising the four public sector general insurers – New India, United India, National Insurance and Oriental Insurance. Preferred Provider Network, or PPN, is made up of hospitals that have agreed to treatment package rates prescribed by the GIPSA.