The alarming rise in COVID-19 cases from several metros means that insurance companies face a surge in hospitalisation claims. Dr S Prakash, Managing Director, Star Health and Allied Insurance speaks to Moneycontrol’s Preeti Kulkarni and shares his views on the claims experience, overcharging by hospitals and reducing cases of fraud. Excerpts:
What has been Star Health’s experience with COVID-19 claims in the last two months?
When we get COVID-related claims, we get them under two categories – confirmed and suspected. We have to give importance to both, as the financial implications remain the same. Investigation, confirmation, diagnosis, treatment and quarantine will also be the same, irrespective of whether it is positive or suspected. So far, we have processed over 2200 COVID-19 claims (as on June 9), including suspected and confirmed cases. Mumbai accounts for the maximum number of claims, followed by Delhi-NCR, Chennai and Pune. The average claim size is Rs 95,000-1,02,000, which is close to 2.5-3 times the average claim for any other infectious disease. The claims are rising. We are now getting close to 123 cases a day and the entire industry is receiving over 800 claims a day.
A section of general insurers feels that hospitals are overcharging COVID-19 patients and there are a lot of variations in expenses billed. How are you dealing with disputes with hospitals, especially over personal protection equipment (PPE), other consumables and isolation charges?
It is a tricky situation. As a doctor, I know certain things are inevitable – PPE, isolation facilities, providing for quarantine expenses of the healthcare staff and so on. I do not deny that these will entail an extra cost, but it has to be uniform and there has to be some standardisation in the charges levied. Hospitals deserve to be paid for extra consumables (for example, PPE, masks, gloves and so on) and the other COVID-19-related expenses they incur. But as a doctor, I also know the cost at which these consumables are made available to hospitals. I am willing to pay for the costs incurred and not for (hospitals’) profits.
What approach do you adopt when you scrutinise claims?
We have identified people in our team who have medical qualifications and good background on infectious diseases to process these claims. When we want to talk to hospitals, we need someone with expertise on medicine and COVID-19 so that there is good communication and understanding between insurers and hospitals. Secondly, we have introduced a scoring system to assess the hospital quality and ethics in our view. We have been capturing them through our score even before COVID-19. We score hospitals on the basis of services they are offering and deficiencies that are encountered. Now, we have 10,000 plus hospitals networked with us and naturally you know that not all 10000 are going to be fair. As per a LexisNexis research report, there is at least a 15 per cent leakage in insurance. All insurers should protect themselves through proper fraud control measures. So, as a first step towards identifying fraudulent hospitals, we decided to recognise ethical and quality hospitals.
Will bringing about standardisation of charges require the intervention of central or state government authorities?
They are under a lot of pressure, so this may not be the priority for them. It will affect our profit and loss statement, but their view might be that insurers and hospitals should sort it out amongst themselves.
In the aftermath of the COVID-19 outbreak, lockdown and job losses, have you seen an increase in the demand for health insurance?
Earlier, people had money but they were not aware of the importance of health insurance. Today, the awareness has increased, but many have no money to buy policies. Ideally, health insurance should be purchased in normal circumstances – both in terms of health and financial comfort.
There are complaints of frontline health workers being denied health insurance covers due to the risks involved. What is Star Health’s approach towards such individuals?
As an industry, we should come forward and offer cover to frontline COVID-19 professionals. They should not be segregated. In fact, we have priced our COVID-specific fixed benefit policy low and we want hospitals to buy it for their staff. It is designed keeping in mind frontline workers who have the risk of getting of getting exposed while caring for patients.