Mismanagement of the Karunya Arogya Suraksha Padhati (KASP), Kerala’s integrated health financing scheme launched in alignment with Ayushman Bharat last year, is draining the exchequer as the authorities continue to look the other way.
Insurance contract
The government’s failure to meet the terms of the insurance contract it signed with Reliance General Insurance Company Ltd. (RGICL) and pay the premium amount on schedule had resulted in the latter writing to the KASP authorities that they were “compelled to defer current and future claim payments for KASP” till the pending premium is received.
RGICL has not been honouring any insurance claims submitted by hospitals since December 26 last, sources said.
But even as the KASP administration continues to lay the blame at the door of the insurance company, the government has not sought any explanation why ₹150 crore, part of the ₹252 crore released by the Finance Department from the treasury on December 14 towards a much-delayed payment of insurance premium instalment, is being allowed to languish in the zero interest escrow account of a private bank for the past one month. Finance Department sources point out that this is a clear violation of government rules which do not allow funds released from the treasury to be kept unused in another account.
Parked in bank
The money has been parked in HDFC Bank (it should have earned interest up to 9% in the treasury) without releasing it to the insurance company.
This is at a time when the government is struggling to even clear small bills for ₹5-10 lakh.
Of the ₹252 crore released, ₹102 crore was handed over to the insurance company only on January 15. In November last, the KASP had unnecessarily held back ₹102 crore released from the treasury towards premium payment for two more weeks in the escrow account before releasing it to the insurance company.
Owned by State
The KASP is almost fully owned by the State. Out of the total payable premium of more than ₹691 crore, the Central share is only ₹137 crore.
“There seems to be a deliberate attempt to systematically derail the State’s own programme. This will only show Kerala in a poor light and serve the agenda of the National Health Agency, which is driven by private consultancy firms,” a public health expert said.
According to the agreement between the State government and RGICL, the government should have paid a premium of ₹620 crore plus (1st and 2nd instalments), out of the KASP’s total premium payable (₹691 crore) by September 30 last.
With just two months left in the current year’s KASP contract, the government has only paid ₹401 crore to the insurance company so far, while the total claims raised by various empanelled hospitals under the KASP has crossed ₹458 crore (till December 31).
Patient care
Patient care is likely to be hit as empanelled hospitals would soon find it difficult to offer free and cashless treatment to the beneficiaries.
