By Kumar Vikram New Delhi, Aug 5 : The Public sector health insurance companies were not able to pass the required validation checks and checks that resulted in mistakes like Multiple settlement of claims, overpayment beyond the sum insured, inaccurate assessment of the admissible amount of a claim and irregular payment for implants and other.
It was revealed in an CAG audit report of ‘Third-Party Administrators in Health Insurance business of Public Sector Insurance Companies’ that was presented in the House of Representatives on Friday.
There are 32 general insurance firms operating in the health insurance in India.Of of these four, four are general insurance companies of the Public sector (PSU insurers) comprising The New India Assurance Company Limited (NIACL), United India Insurance Company Limited (UIICL), The Oriental Insurance Company Limited (OICL) and National Insurance Company Limited (NICL) providing a variety of health insurance products.
Audits of data have found that NIACL and UIICL have paid out claims Multiple times at different times, even though the policy number insured name, beneficiary’s name dates of hospitalisation, illness code the hospital’s name and the disease are the same.
Audit identified 792 instances (Rs 4.93 crore) of Multiple settlements in NIACL and 12,532 instances (Rs 8.60 crore) of Multiple settlements in UIICL according to the database.Additionally, Audit observed in NIACL that the settlements made to policyholders surpassed the sum insured plus the cumulative bonus in 139 retail claims , indicating an the payment was in Excess of the amount of Rs 33 lakh.
In UIICL the amount paid was greater than the amount insured in 223 claims totalling the sum of 36.13 crore.This comprised group claims.
For policies that cover groups there is a provision in the policy for Excess payment above sum insured through the use of the ‘Corporate buffer’.However the claim processing note was not verified to indicate the any use of buffer or the buffer balance of buffer and usage as such, according to the audit report.
TPAs are required to conduct an investigation of claims in accordance with the the Service Level Agreement but in NIACL, UIICL and OICL, 562 claims (for 40.46 crore) 40.46 crore) out of 2,735 samples of claims were not accompanied by investigation reports, according to the report.
The audit report highlighted that the procedures and systems to conduct Internal Audit / Health Audit were not adequate and the amount of audits performed was not significant when in comparison to the fixedor total number of claims that were settled.
“During the three years of financial year that ended in March 2019 659 audits of claims handled by TPAs were carried out by Health Audit teams constituted by PSU insurers.A total recuperation of the sum of Rs 14.30 crore was reported but PSU Insurers have collected only the sum of 6.06 crore.” in the audit report.
All four PSU Insurers suffered loss in the health insurance portfolio in the five years between 2016-17 and 2020-21.
Total loss of the four PSU Insurers was Rs 26,364 crore in 2016-17 and 2020-21.