Health Insurance Companies and Third Party Administrators

Large number of the health insurance companies in India suffer loss and have been doing so for years together. The group health insurance profile is that can cause maximum leakage to the health insurance companies in India.

The process of united india health insurance claims is handled by third party administrators or even much better known as TPAs. And So when a customer is admitted to a hospital all payments and even claims are handed on to the TPA who then processes the claims on behalf of the health insurance organizations. This facilitates the insurance companies focus their energies as well as sources in their core business of insurance underwriting and moreover business development. Yet it was found that the TPAs were contributing to huge number of fraudulent claims being sent into the system in connivance with the hospitals. Even inflated bills were being made the hospitals in case the patient has a health insurance. It was almost a case of differential treatment. The patient was not too worried as the payment was being paid by the health insurance company anyway.

In the middle of 2010, the public sector health insurance companies, namely United India, New India, Oriental Insurance as well as National Insurance took a tough stand and blacklisted big hospitals where such practices were taking place. They removed these hospitals from the list from that cashless medical facilities can be acquired by the customers. This caused a lot of pain to the insured, but the industry woke up to the fact that insurance companies were being taken for a ride.

The 4 public sector health insurance companies then decided to float a TPA of their own and do away with the middlemen who were not falling in line. This action is anticipated to decrease the frequency of false claims creeping their business. The move has attained big assistance even from the private health insurance companies. The issure was not of the public sector health insurance companies alone as well as lot of private sector companies have done away with the training of TPAs and even used to process claims through in-house representatives.

The new TPA undertaking is anticipated to be finalized by the end of October 2010 and even we should see huge volume of relief to the customers. It is a step in the proper path and even will the health insurance industry in India as a whole.