Irdai prescribes a health tonic

Byaskinghealthinsurerstoaccessanationallistofdoctors,theregulatorhopestoencourage themtooffermoreflexiblepoliciesoutsideofthehospitalnetwork

Amid the blitzkrieg of orders issued by the Insurance Regulatory and Development Authority of India (Irdai) last week, one stands out. The order has asked the health insurance and general insurance companies that offer health cover to access a national list of doctors being developed by the government’s Ayushman Bharat Digital Mission.

Other than life insurance, Indians buy health insurance. Irdai data shows that health covers account for over 35 per cent of all non-life insurance policies by premium (April-october 2022). But dissatisfaction levels are high. Insurance companies claim the hospitals and sometimes the insured cheat them, the customers often feel their claims are wrongly repudiated.

In trying to introduce efficiencies in the business, Irdai has complained that no lasting improvement is possible unless a regulator is appointed for hospitals or doctors monitored. Since health is a state subject, this has proved difficult.

In this context, the Irdai order of last week is significant. It has asked the insurance companies to dip into the Healthcare Professional Registry (HPR) being developed by the National Health Authority, which runs the Ayushman Bharat Mission. Less than a third of India’s doctor population is listed in the HPR. The doctors are all registered by the respective state medical councils, but the list at the Medical Council of India (MCI) has not been updated for decades. Irdai has taken a proactive position of bypassing this problem and made a soft entry into regulating the health sector.

The implication is huge. Till now, non-life companies that offer health cover did not deal with doctors; they deal with hospitals, even if in many small towns those are nursing homes run by a single doctor. The point of contact or liability was shared by the insurance company with these hospitals. So why is Irdai introducing doctors into the health insurance policy?

A senior official of a state-run insurer explains that the order is designed encourage insurers to offer more health policies that do not require hospitalisation. The Irdai order makes this very clear. “The general and health insurers offering health insurance policies can also consider leveraging on the Health Professional Registry for building up the network of doctors/physicians or other healthcare professionals for providing OPD or other healthcare services,” it notes. It means health insurers can deal with the doctors directly to settle claims.

Once rolled out nationwide, the regulatory changes could transform the health insurance sector, which accounts for the biggest share of the non-life business. The Irdai order makes it clear that the names of doctors will be verified by Aadhaar or other Know Your Customer documents, “along with the medical qualifications of the medical professional which is verified by their respective state medical councils”. The names have been double checked in HPR. “The HPR identity will enable the validation and authentication of medical practitioners by insurers for issuing policies acting as a layer of protection to curb any fraudulent activities,” said Priya Deshmukh Gilbile, chief operating officer, Manipalcigna Health Insurance.

Insurance Institute of India, a think tank set up by Irdai, estimates the number of false claims in the industry at close to one-fifth of total claims. In a report, it suggests that the healthcare insurance industry in India is losing up to ~800 crore every year on such claims. As a study by FICCI notes: “It would be quite difficult for a customer to file a fraudulent claim or fake medical documents without the connivance of the treating doctor or hospital.” As a way out, the study suggests that “individual doctors already have a registration ID and the pre-authorisation and claim forms seek this ID. The industry needs to insist that this number be provided for more active profiling of individual doctors”.

The HPR gets around this problem by making it sure the doctors are what they claim to be and can be traced. Once this is established, expect insurance companies to offer cheaper health policies that cover simple medical check-ups, tests and medicines. As of now, only insurance companies with deep pockets such as Bajaj Allianz and HDFC Ergo offer these policies. Even though Irdai has brought in a use-and-file system, which means insurance companies can devise such policies and only file the details with the regulator later, other companies have not ventured down this road because the verifiable identity of the doctor was a crucial missing link to establish confidence among underwriters.

The Irdai initiative can, however, open a Pandora’s box. Most doctors are not registered with HPR and without incentives have no reason to do the additional paperwork. Further, as a senior National Health Authority functionary said, it was almost certain that the HPR and MCI records will not match. Those doctors who find themselves unable to compete for patients for lack of registration on the HPR are likely to feel aggrieved.

Because of low per capita income, a sizable segment of India’s insured insist on cashless treatment. Insurance data shows about 40 per cent of India’s health claims are cashless. Deshmukh Gilbile said HPR provides this opportunity to expand the route. “Insurers can leverage this data to boost cashless OPD coverage across India and make cashless OPD coverage accessible to a large chunk of the population, thus, taking the nation’s access to healthcare a step ahead.” As Bhargav Dasgupta, MD and CEO of ICICI Lombard, said: “These are pathbreaking reforms that will encourage customer-centric innovations.”

But some blowback from the highly organised medical sector to these disciplining measures is inevitable.

The initiative can, however, open a Pandora’s box. Most doctors are not registered with HPR and without incentives have no reason to do the additional paperwork