Can the National Health Claims Exchange rollout be the UPI moment for health insurance claims?

How NHCX can help policyholders, hospitals and insurers

India's health insurance landscape has undergone a significant transformation in recent years. This progress is driven by new regulatory reforms, increased awareness, and technological advancements.

On one hand, the insurance regulator, Insurance Regulatory and Development Authority (IRDAI), has introduced measures to enhance transparency and standardise policies. On the other hand, the government’s Ayushman Bharat scheme has expanded coverage to millions of vulnerable families.

The raging Covid-19 pandemic that broke out four years ago further accelerated the adoption of telemedicine and highlighted the importance of health insurance.

Insurers have diversified product offerings to include critical illness, disease-specific, and wellness-focused plans. Group health insurance provided by employers has grown, contributing to an uptick in overall coverage.

However, despite all these progresses, the traditional claims process —  known for its paperwork and delays —  remained a bottleneck.

Also read: New health insurance claims rule: Shorter wait for pre-existing illnesses, no disputes after five years of policy coverage

The challenge of traditional claims

The claims process has been a paradox to the health insurance industry. The current system is cumbersome, with claims processing taking weeks or even months. This creates a stressful situation for both policyholders and hospitals. Though there were attempts to address the critical issue, it remained a stumbling block. With the advent of digital tools, insurers have strived to pave the way for a smoother claims experience.

NHCX: A UPI moment for health insurance claims

Recognising these challenges, the IRDAI has taken significant steps to improve the cashless claims process. The introduction of the National Health Claims Exchange (NHCX) and the master circular on health insurance mark critical milestones in this journey. These initiatives aim to standardise claim procedures, ensure timely settlements, and foster transparency.

The NHCX will serve as a centralised platform for the exchange of information and quick decisions. It will not only streamline the claims process but also reduce the scope for discrepancies and fraud. The exchange is a routing switch.

Today, health insurance faces significant challenges in ensuring proper and efficient claim service, which leads to delays in discharges and hospitals struggling to understand health insurance products and protocols. This lack of clarity between hospitals and insurance companies erodes trust and confidence in the insurance system for policyholders.

Benefits for policyholders

•         Smooth claims experience

•         Reduces waiting time for approval during discharge from hospital

•         Availability of electronic health records can help doctors make faster decisions in medical management

How do hospitals gain?

• Single unified portal instead of multiple portals

• More hospitals willing to get empanelled can help regulator’s objective of 100 percent cashless settlement

• Ease in tracking payments and delays

• Better insurance services with optimal manpower

• Timely service will help making hospital beds available for critical patients during emergencies such as epidemic and pandemic

Advantages for insurers

• Timely service

• Customer satisfaction

• Fraud prevention

• Reduces cost of claims processing

• Eliminates friction between payer and provider

Focused processes, lower operating expenses and better consumer contentment can lead to higher penetration of insurance. An increase in health insurance adoption is likely if a greater number of individuals get to experience the ease of the claim-making process, in turn,  expanding universal health coverage.

Also read: Common hospital network and health claims exchange can minimise claim hassles, says IRDAI chief

The road ahead

In the initial phase, both the hospitals and insurance companies might face teething problems in aligning with the new directives. Inconsistent data management systems, varying administrative practices, and resistance to change are notable hurdles. However, these challenges are not insurmountable.

The IRDAI's initiatives are designed to bridge the gap, providing a framework for hospitals to transition smoothly to digital mechanisms. Training programmes, financial incentives, and collaborative efforts between insurers and healthcare providers can facilitate this transition, ensuring that the benefits of digital claims processing are realised across the board.

Insurance companies' role

Insurance companies should be the first to initiate efficient cashless claims payment methods by adopting technology. Advanced claim management systems using artificial intelligence (AI) and machine learning (ML) can automate pre-authorisation, detect fraud, and speed up approvals.

It will be prudent for insurers to invest in learning programmes that enable their personnel as well as healthcare partners to understand how to use digital platforms.

Creating specialised desks for assistance plus customer service teams can ensure smoother and faster settlements.

The NHCX is a revolutionary step towards a more efficient, transparent, and patient-centred healthcare system. By working together, regulators, insurers, and healthcare providers can leverage technology to unlock the full potential of cashless claims processing, ultimately contributing to the vision of ‘Insurance for all by 2047’.