The Insurance Regulatory & Development Authority's (Irda's) much-awaited health insurance guidelines are expected to include standard treatment norms for diseases, a common list of exclusions and a tightened noose around claim settlement.
J Hari Narayan, chairman, Irda, said, "We will address the issue of policy exclusions, claim settlement period and the definition of critical illness. All these norms will form a part of the health insurance guidelines."
Irda is working with working committees consisting of members of the Confederation of Indian Industry and Federation of Indian Chambers of Commerce & Industry (FICCI).
"These bodies are providing suggestions on common problems of policyholders that need immediate attention," Hari Narayan added.
According to sources, the proposals are currently in draft form, but are likely to be posted on Irda's website in the next couple months for comments.
Irda may come out with standard treatment guidelines (STGs) for common causes of hospitalisation like diarrhoea, asthma, cataract surgery and typhoid.
"Standardisation will help in setting appropriate levels of payout for different types of surgeries in fixed-benefit reimbursement plans. It will also provide a framework for development of appropriate price range," stated the FICCI report.
The industry body has recommended 22 STGs to Irda. The move may also help prevent standoffs like the recent one between hospitals and public sector health insurers.
While hospital charges or premiums may not fall within the ambit of the proposals, tackling the problem from the insurers' side will ensure more transparency.
"The STGs will act as a referral point for policyholders. They will be aware of benchmark costs involved in treating an ailment. After that, it will depend on the hospital they choose to go to," said S L Mohan, general secretary, General Insurance Council. Mohan was a part of FICCI's working committee.
"If these norms are brought in, it will definitely help fix the problem of sky-rocketing hospital charges," said an industry expert, who did not wish to be named.
Furthermore, 203 items will constitute a likely list of common exclusions under non-medical expenses. This may include costs for a birth certificate, diabetic chart or external durable device like walking aids and cervical collar.
Other costs like ward booking, eye kits and X-ray films may also not be payable. But these will be included under sub-limits like charges for operation theatre and radiology. Depending on the plan, most health insurance products cover such expenses.
Typically, dental treatment, psychiatric disorders and healing of sexually transmitted diseases are excluded from medical expenses. This is likely to continue.
The definitions of 11 critical illnesses have been submitted to Irda. These include cancer, first heart attack, open heart replacement and major organ/bone marrow transplant, among others.
Insurers may have to cover similar and equal number of illnesses under critical illness plans if this recommendation is adopted.
Illnesses covered by insurers under this plan differ due to different definitions adopted by each one. Moreover, standard definitions also mean that products can be compared. "Since most of these are long-term products, they are reinsured. Varied definitions posed a problem for reinsurers in pricing the product," said a health insurance expert.
These moves will not only standardise diseases covered by health insurers, but will also simplify the clauses of health cover. But the industry is concerned.
"We are hopeful that Irda will ensure that companies have a profitable portfolio on their books and that the norms allow the industry to innovate," said Ajay Bimbhet, managing director, Royal Sundaram Alliance Insurance.
Irda is also likely to come out with a common form for claim settlement and will fix the number of days within which a claim must be settled.
