From providing health insurance policyholders an option to choose third-party administrators (TPAs) to proposing a hike in the fees it levied on such firms, insurance regulator IRDAI has mooted multiple changes in the regulations governing TPA-Health Services.
For greater competition, it is proposed to allow the policyholders to choose the TPA of their choice from those engaged by the insurer. Suitable regulatory provisions are proposed, IRDAI said while inviting comments on an exposure draft on changes to the regulations.
However, TPAs would not be allowed to canvass the business of rendering health services directly from the policyholders or prospects.
On their part, insurers need to explicitly provide names of the TPAs from whom the policyholder may choose, at the point of sale.
The policyholder would be allowed to change the TPA only at the point of renewal. Where only one TPA is engaged by the insurer, no option need be provided to the policyholder, IRDAI said.
A range of services are offered by TPAs in health insurance segment from administering services to handling claims. They play the role of a facilitator and serve as a crucial link between the insurers they represent and the hospitals.
The first set of regulations governing the TPAs, which also marked the introduction of the concept of TPAs in the health insurance space, came in 2001.
New provisions
They were revisited in 2016 and the present exposure draft intended to issue clarifications as well as introduce certain new provisions and carry out some modifications. Sources in the industry said that while the role and services of TPAs were important, there were a few companies who preferred to do the work in-house.
Figuring in the list of changes sought to be made is an increase in various fees charged by the authority from the TPAs, which has remained unchanged since 2001. The proposal is to revise the non-refundable processing fee from ₹20,000 to ₹1 lakh; registration fee for new applicants from ₹30,000 to ₹2 lakh; and renewal application fee from ₹15,000 to ₹1.50 lakh.
The IRDAI has also proposed a set of qualifying norms for TPA promoters, including those pertaining to their shareholding.
Further, it has suggested a change in the wordings to increase the scope of health services provided by TPAs to policyholders of foreign insurers visiting India.
