The General Insurance Council (GIC) has recently come out with rate chart for COVID-19 treatment, taking into account rates published by various state governments, after discussion with experts. The council has made it clear that the reference rates are variable and will be revisited every month.
Insurance companies shall be guided by the treatment protocols prescribed by ICMR. These rates are broadly based on the schedule of rates suggested for COVID-19 treatment by Niti Ayog panel. These rates will be applicable to both cashless and reimbursement claims in states/ union territories/ cities where any government authority has not published standard charges for COVID-19 treatment. Wherever, treatment charges have been published by any authority, those charges shall be applicable to insurance claims with member companies. The settlement under COVID-19 insurance claims shall be subject to the limits and terms of the policy of respective insurer.
The capping of procedure rates comes at a time when the country witnesses more than 10 lakh active cases. Moreover, the insurers have already made claim payout to the tune of Rs 900 crore while settling 55,000 COVID related claims.
However, the corporate hospitals are not comfortable with the capping of the rates. They are worried the council may go for capping of all the procedures. GIC has come out with a schedule of rates for claims being filed with its member insurance companies, capping the ICU with ventilator care at Rs 18,000 per day in the case of ‘very severe sickness’ in hospitals accredited with National Accreditation Board for Hospitals & Healthcare Providers (NABH).
In the case ‘moderate sickness’, NABH-accredited hospitals (including entry level) can charge Rs 10,000 per day (including Rs 1,200 for PPE) and for non-NABH accredited hospital) it would be Rs 8,000 (including cost of PPE Rs 1,200). The corporate hospitals are planning to approach IRDAI, insurers and the council for initiation of dialogue on the issue.
Mumbai-based hospitals have already approached the state government. GIC has indicated the rates are not constant and will review them every month. “We have arrived at the rates based on our experience of over 50,000 COVID claims which have been settled so far. If there is any peculiarity then it can be seen separately,” says MN Sarma, Secretary of GIC.
Mumbai-based Zen Hospital, which has already implemented the revised rates, says that there should be differential for various hospitals. “There has been profit-making and even exploitation by hospitals. A lot of network hospitals are not doing cashless so as to avoid capping of charges, says Dr Roy Patankar, Director at Zen Hospital.
GIC is in favour of categorising hospitals based on the number of facilities they provide, investment made by the promoters and the number of beds they boast of having.
If no tab is put on such rates then the insurers will end up incurring heavy losses under the health insurance portfolio. Consequently, there will be spike in the premia when one goes for renewal of one’s health insurance policy next year. PPE continues to be another contentious issue. Hospitals complain insurers are not reimbursing the cost of PPE used by the hospitals while treating the patients. On their part, the insurers feel that they are not against it. The only thing that the hospitals must charge it reasonably.
The hospitals use PPE kit for four hours in a row before changing the same and they diagnose a number of patients with the same kit. Hence there is no logic for them to charge for same PPE kit from every patient.This problem doesn’t arise for government hospitals.
Dr Patankar says that when it comes to individual insured patients, the insurers are denying the same and hence hospitals are compelled to ask the patients to bear the cost on their own. On their part, insurers have a different tale to tell.
“What is happening that hospitals are charging the cost of PPE per hospital staff per bed. We are opposed to it and we want them to price it by dividing the same with the number of beds they have,” Sarma says. Meanwhile, a PIL has been filed in Supreme Court by Avishek Goenka against the council’s move of capping of the COVID procedure rates. While hearing the petition, the apex court’s bench, headed by Justice Ashok Bhushan issued notice to the Centre to find out ways how to resolve the issue.
In another case, the Delhi high court has declined to entertain a PIL seeking review of the AAP government’s decision to cap the price of COVID-19 treatment and directed that it be treated as a representation. The country’s largest specialised health insurer, Star Health & Allied Insurance is also in favour of capping of hospital treatment charges so as to curb the practice as adopted by the hospitals while sending inflated bills to the insurers.
Dr S Prakash, MD of Star Health Insurance, says that the cost of COVID treatment normally comes to be 2.5 times more than that of the non-COVID patients. Hence, hospitals are free to send us the genuine bills in case of COVID procedures. The only thing is that they are also having shortage of manpower and are faced with higher cost due to PPE involved. So, they find themselves in a catch-22 situation. There is a need for the players, service providers, and policyholders to understand each other.”
Even though actuaries have advocated for having a standardised rate for COVID-19 procedures, they feel that the same must be reviewed from time to time. “I think this is a welcome step given the COVID-19 is a new illness with no established protocols and standardised treatment. This standard rate will bring in certainly among patients and also will be an important input for pricing. In addition to that it would also bring clarity and transparency in the treatment of COVID-19,” says Gopal V Kumar, Actuary & Economist, Radgo & Company. The premia, as per Sanjay Datta, Chief, Underwriting and Claims, ICICI Lombard, have already gone up by 5 to 7 per cent as of now.
Hospitals are right about complaining that uniform tariff will not work as charges for different hospitals may vary based on various parameters. The only way out is categorisation of hospitals, which is yet to be done. Moreover, there is no regulator for the hospitals in India.
According to G Srinivasan, Director of National Insurance Academy, health insurance may grow by 15 to 20 per cent within next six months.