RTI Court Decision: CIC asks United India Insurance to disclose information that may help close a loophole - I

[akhilesh yadav]

CIC asks United India Insurance to disclose information that may help close a loophole - I

Reported by Raj Pradhan in moneylife.in on 27 July 2012
CIC asks United India Insurance to disclose information that may help close a loophole - I - Moneylife Personal Finance site and magazine

United India Insurance denied cashless feature for few months after policy citing data was not updated by the TPA. In the age of technology, this seems to be an insurer and/or TPA strategy rather than inefficiency

In a landmark judgement the Central Information Commission (CIC) directed United India Insurance Company (UIIC) to mandate all to put up on the company’s website information on date of issue of each mediclaim policy and date of transfer of the policy related information to the TPA Third Party Administrator. It will surely enhance the transparency for all future policy purchases or renewals. This information is not mandated to be given for past policies and hence it is unlikely UIIC will comply for historical data. The CIC decision comes after one year of RTI (Right to Information) activism by Moneylife subscriber Dr Anshu Agrawal from Janakpuri, Bareilly, who finally got justice in the second appeal before the Commission on 28 June 2012.

This will surely put insurers and TPAs on the back-foot as this hide-and-seek game between insurers and TPAs has been the root cause of senseless denial of legitimatecashless feature for almost two-three months after each customer policy renewal. According to Dr Agrawal, “This ruling will soon be applicable to other insurers who operate through TPAs”. Dr Agrawal had filed an RTI application with the Insurance Regulatory and Development Authority (IRDA) to find if there were any guidelines on the time limit for the insurer to dispatch the policy copy to the TPA. According to RTI reply, “IRDA has not mandated any time limit.”

A delay of two to three months to give renewal information to the TPA and/or TPAs not updating their systems with renewal information leads to denial of cashless approval under an inexplicable excuse that the customer has not renewed the policy even though the insurer has encashed the payment cheque two to three months back. This is nothing short of cheating. What’s more disturbing is that this can even impact reimbursement claim.

According to another Moneylife reader, “United India has instructed its offices to send soft data, to the TPAs, of health insurance renewals once a month only, usually on the last day of the month. As a result when an insured is admitted to a hospital a week or two after his policy has been renewed and he contacts the TPA, he is told that as per their records his policy has not been renewed and therefore they are unable his claim even though he had called them within the mandatory 24-hour deadline! As a result he is also denied cashless facility and has to go in for reimbursement which again will be denied on the grounds that the claim was not reported within 24 hours!”

Dr Anshu Agrawal, says, “I tried to find out the working of a branch office of UIIC. If you buy one health policy on say 1^st June, they receive bank statement only by 15^th July. They take another 15 days for reconciliation of bank statement manually. Another one month is taken to download form 64VB from their website to fill it, copy it and despatch to the TPA. In the era of net-banking and e-mail communicability, UIIC is living in medieval era.”

Dr Agrawal got a cashless ID card from his TPA almost one year after buying mediclaim and that too after long persuasion with UIIC regional customer care department and couple of complaints on their website. The subsequent renewals despatch by UIIC was consistently after couple of months of expiry date of previous mediclaim. He was worried about claims denial in case there was medical need within the two-three months of policyrenewal.

One year ago, Dr Agrawal sought information under RTI about mediclaim issue dates and policy despatch dates by the Bareilly branch office, how many days does it take for a health policy to be dispatched to TPA and whether cashless or reimbursement claim will be honoured if the TPA does not have policy renewal details. The answers to these questions may just startle you.

Read the second part of the article tomorrow to understand how UIIC CPIO still continues to evade giving information even after the CIC took the liberty of looking at the issue in larger public interest of all insurance policyholders to issue the landmark judgement.

[akhilesh yadav]

Sponsorer

CIC directs United India to disclose information that will help close a loop-hole - II
Reported by Raj Pradhan in moneylife.com on 30 July 2012
CIC directs United India to disclose information that will help close a loop-hole - II - Moneylife Personal Finance site and magazine

CIC’s decision to make United India put the date of the policy renewal and the date of policy dispatch to the TPA for every policy will put the onus on the insurer to ensure there is no lapse from its side

The sweet victory for Dr Anshu Agrawal was that Central Information Commission (CIC) took the liberty of looking at the issue in the larger public interest of the insurance policyholders and not just confined to the United India Insurance Company’s (UIIC) Bareilly office. The CIC recommended to the chairman and managing director of United India to give directions to all branch managers to put up on the company’s website the following information by 16 August 2012: Mediclaim policy number (no names are required to be given), policy date of issue, date of transfer of the said policy to the TPA Third Party Administrator.

While the option to give past data is left with UIIC, it is unlikely they will give historical data. Giving the information for present and future policy purchases and renewals will mean that the UIIC will have to improve its processes to really live up to its own answer of ‘immediately’ sending of policy data to the TPA.

One year ago Dr Agrawal had filed a Right to Information (RTI) application seeking UIIC answers. The answer to the question on how many days it takes for a health policy to be dispatched by UIIC to TPA was unbelievably—‘immediately’. Obviously, UIIC Chief Public Information Officer (CPIO) did not want to give any specific number of days, which would have been an embarrassment for them. Dr Agrawal was obviously not satisfied with the term ‘immediately’ which did not give specific answer.

UIIC was blatant enough to agree in the RTI reply that cashless and reimbursement claim will be denied if the TPA does not have policy renewal data. If it takes two to three months for the policy purchase or renewal data to reach the TPA and/or TPA does not update his system, why should the insured pay the price of cashless or reimbursement claim denial? It is a shame if insured is paying for inexplicable inefficiencies of the insurer and/or the TPA.

On the question of data for mediclaim issue date and policy dispatch date for mediclaim policies purchased or renewed by the Bareilly branch office, UIIC CPIO refused to divulge the data in the RTI answer by stating that the information is under fiduciary relationship and is not in larger public interest.

Finally, in the second appeal, the CIC directed UIIC to give information on the total number of mediclaim policies issued by the Bareilly office that were dispatched to the TPA after one week of the date of issue. Even after a specific directive from the CIC, UIIC CPIO has dared to defy it by giving irrelevant data of 297 mediclaim policies issued by the Bareilly office in 2010-11, out of which 293 policies have been sent to the TPA. Can the UIIC CPIO not read that CIC judgement that data on policies that were dispatched to the TPA after one week of the date of issue should be disclosed?

[akhilesh yadav]

United India CPIO defies CIC order, gives irrelevant data to RTI petitioner
Reported by Raj prdhan in moneylife.in on 30 July 2012
United India CPIO defies CIC order, gives irrelevant data to RTI petitioner - Moneylife Personal Finance site and magazine

While CIC’s directive to United India to put the date of the policy renewal and the date of policy dispatch to the TPA for every policy is welcome, it has not disclosed everything

The sweet victory for Dr Anshu Agrawal was that Central Information Commission (CIC) took the liberty of looking at the issue in the larger public interest of the insurance policyholders and not just confined to the United India Insurance Company's (UIIC) Bareilly office. The CIC recommended to the chairman and managing director of United India to give directions to all branch managers to put up on the company's website the following information by 16 August 2012: Mediclaim policy number (no names are required to be given), policy date of issue, date of transfer of the said policy to the TPA Third Party Administrator.

While the option to give past data is left with UIIC, it is unlikely they will give historical data. Giving the information for present and future policy purchases and renewals will mean that the UIIC will have to improve its processes to really live up to its own answer of 'immediately' sending of policy data to the TPA.

One year ago Dr Agrawal had filed a Right to Information (RTI) application seeking UIIC answers. The answer to the question on how many days it takes for a health policy to be dispatched by UIIC to TPA was unbelievably-'immediately'. Obviously, UIIC Chief Public Information Officer (CPIO) did not want to give any specific number of days, which would have been an embarrassment for them. Dr Agrawal was obviously not satisfied with the term 'immediately' which did not give specific answer.

UIIC was blatant enough to agree in the RTI reply that cashless and reimbursement claim will be denied if the TPA does not have policy renewal data. If it takes two to three months for the policy purchase or renewal data to reach the TPA and/or TPA does not update his system, why should the insured pay the price of cashless or reimbursement claim denial? It is a shame if insured is paying for inexplicable inefficiencies of the insurer and/or the TPA.

On the question of data for mediclaim issue date and policy dispatch date for mediclaim policies purchased or renewed by the Bareilly branch office, UIIC CPIO refused to divulge the data in the RTI answer by stating that the information is under fiduciary relationship and is not in larger public interest.

Finally, in the second appeal, the CIC directed UIIC to give information on the total number of mediclaim policies issued by the Bareilly office that were dispatched to the TPA after one week of the date of issue. Even after a specific directive from the CIC, UIIC CPIO has dared to defy it by giving irrelevant data of 297 mediclaim policies issued by the Bareilly office in 2010-11, out of which 293 policies have been sent to the TPA. Can the UIIC CPIO not read that CIC judgement that data on policies that were dispatched to the TPA after one week of the date of issue should be disclosed?

[Sajib Nandi]

Reported by Raj Pradhan in Moneylife.in on 31/07/2012
United India Insurance doles out incentives to TPAs to reduce claims ratio! - Moneylife Personal Finance site and magazine

The third part of the United India series, it has been found out through RTI that TPAs are given incentives by United India Insurance to reduce the claims ratio, thus making a mockery of the Insurance Act!

Moneylife subscriber Dr Anshu Agrawal from Janakpuri, Bareilly filed a Right to Information (RTI) application to uncover the incomprehensible delay in policy renewal information, sent from United India Insurance Company (UIIC) to E-meditek, a TPA (Third Party Administrator), also stumbled upon a bizarre clause in the contract between the insurer and the TPA. Apparently, there is an incentive given to E-meditek for keeping the claims ratio within a certain range. This is completely detrimental to the interest of the policyholder whose genuine claims can also be partially paid or rejected just so that the TPA is able to get incentives from UIIC.

Claims ratio means claims payable as a percentage of premium income. The lower the ratio, the better it is for the insurance company. Government insurers have claims ratio in the range of 100% to 120%, which means they are paying more in claims as compared to the income from premium collection. By putting this incentive clause, the TPA will obviously do everything possible to limit the claims outgo.

The UIIC contract with the TPA states that if the incurred claims ratio is 70% to 90%, then there is an incentive of 10% of the amount by which incurred claim is reduced as against the previous financial year. If the incurred claims ratio is 50% to 70%, then there is an incentive of 20% of the amount by which incurred claim is reduced as against the previous financial year.

These clauses would be between UIIC and all their TPAs. Moreover, it is not just restricted to UIIC. Gaurang Damani, a social activist who has filed number of public interest litigations (PILs), has found by RTI that the same clause is present between New India Assurance and its TPAs. It seems to be something common to government insurers and their contract with TPAs.

According to Mr Damani, “This is a violation of Section 52(1the) of Insurance Act – Dividing Principle. A claim of one person cannot be used to offset the claim of another person. In short, the insurer/TPA cannot offset losses from one policy against another policy.” Interesting, Insurance Regulator and Development Authority (IRDA) has chosen to ignore or keep quiet on this important point in the PIL filed by Mr Damani.

The other interesting point in the contact was about SMS sent by TPAs to the insured about despatch of mediclaim cards and renewal of cards. This is simply not done today. In the case of UIIC, the policyholder renewal information may be updated on the TPA’s system after couple of months due to delay by the insurer or the TPA. While the CIC decision to make all branches of UIIC to put data on date of the policy renewal and despatch date to the TPA on the UIIC website from 16 August 2012, mandating SMS by the TPA to the insured about despatch of cards and renewal of cards will be something UIIC should ensure. This is in the contract and should be complied by the TPA.