wowlife100: Medicash

Now, Swipe for Medical Insurance Claims

A new instrument similar to swipe machines used for debit & credit cards could change how Indian health insurance industry works

SHILPY SINHA MUMBAI

The worry about whether a medical insurance claim will be paid by the insurer is often a bigger worry for people than the agony of the physical ailment itself. But things could change. A 12-inch sized instrument akin to the machines that are used to swipe debit and credit cards at merchant establishments may well change the way the Indian health insurance industry functions. Many hospitals, insurance companies and policy holders may be the biggest beneficiaries of the slow entry of Medicash if it gathers acceptability. But those hospitals, which colluded with so-called thirdparty agents to inflate medical bills and earned easy money, may be the losers. “TPAs’ (third-party administrator) job will shrink,” said Gopal Verma, chairman, E-Meditek, the company that developed Medicash. “This will open up the outpatient department window.” A Medicash card can be swiped at the point-of-sale terminal. Like credit card payments, policyholders will get a cashless authorisation slip. Post this, the insurance company calls up the customer and at the time of discharge, shares communication regarding the approved amount through SMS and email. The medical insurance industry may be at the cusp of change like the travel and tourism industry a decade ago when internet turned the industry on its head. The booking of tickets not only eliminated travel agents’ near-iron grip over the industry, but also made travel convenient. Healthcare insurance is among the fastest growing segments of the general insurance industry.

Estimates by industry lobby group Ficci shows that health insurance may grow 25% in the next five years. Three out of every 100 medical claims are rejected every year. But if this machine gains currency, industry could grow faster as there could be claims even for day visits to a hospital for minor illness, instead of hospitalisation for surgeries which is the practice now. The rising costs of hospitalisation and the spread of killer diseases are forcing people to seek medical insurance where many companies do not provide medical cover. But the problem is that even if individuals buy medical insurance, many a time, the individual is denied claims citing some rule, or the other. Medicash can eliminate the rejection risk for the one who holds the card. It may be time before it takes off since not many insurers have agreed to use this. E-Meditek has tied up with 1,000 hospitals and L&T General Insurance to provide this cashless facility to L&T’s corporate customers. It has an exclusivity agreement with the company for few months. Once it ends, attempts could be made to extend the service to state-run general insurers, the biggest. As in any technological innovation, there are some who suffer. For example, the TPAs. TPAs such as Raksha and Medi Assist are the middlemen in settling nearly . 8,000 crore of claims a year. Those charges forced ICICI Lombard and Bajaj Allianz to assess and settle inhouse claims three years ago. That has prompted four public sector companies to look at other alternatives. New India Assurance, National India, Oriental and United India Insurance are in the process of setting up an in-house TPA, which would be operational by the end of this financial year. “It could add to the comfort of policyholders in settling claims,” said Madhavan B, CEO, Medi Assist India. “Insurance companies will need TPAs for servicing claims but the efficiency will improve.”
shilpy .sinha @timesgroup .com