30 Minute Interview

'Our Focus has Shifted from Claims Processing to Claims Management'

Accounting for 80 per cent of the Rs 3,500-crore health insurance market, the TPA market is growing at an annual rate of 35 per cent. Medi Assist India Pvt Ltd, a partnership venture of Nadathur Holdings and Reliance Health Ventures, is one of the leading Indian TPAs servicing 15 insurance companies. With 21 branches, it has a wide customer base of more than 2,000 SMEs and 2.3 million lives across the country.
Recently, it announced partnership with Hewlett Packard (HP) to develop customised application for running TPA services and to provide end-to-end solution to customers. On this occasion, B Madhavan, Chief Operations Officer, Medi Assist India Pvt Ltd spoke to Rita Dutta about the growth of the company and its future plans. Excerpts:

B Madhavan Chief Operations Officer, Medi Assist India Pvt Ltd

Ideally, TPAs should not take more than one month to settle claims. However, most TPAs are taking months to settle claims. What are the reasons for the delay?

To settle claims for cashless, we take around six hours and for re-imbursements about seven to 15 days. An overwhelming reason for delay is insufficient submission of documents by the client. The other reasons could be difference in interpretation in policy/conditions and also dispute in the
quantum of claims.

What are the ways to decrease the delay in claims settlement?

Introduction of standardised billing format, standardisation of rates for different ailments and procedures and making them part of the policy document will considerably reduce the time taken to negotiate the claim amount and calling for details.

Initially, there were protests from insurers and medical community about the role and functioning of TPAs. Has their attitude changed now?

Yes, this has significantly changed. The medical community has realised the value of TPAs in facilitating cashless claims settlement and as a channel for their business.

The entry of TPAs was not well planned, which led to massive mismanagement. So much so that the Ministry of Finance had to step in to review the performance of TPAs. What is the scenario now?

No comments, except that the services provided by the TPAs is challenging one. We need to add value to the insurers, corporate, clients and hospitals. Reconciling between these conflicting interests is a skilled job and setting up the systems and process takes time. The industry has considerably matured from where it was and is poised to handle the challenges.

What are the additional services that Medi Assist provides?

We provide analysis of claim data, online enrollment for ID cards, online verification of status of ID cards and claims. This initiative has completed pilot run. After ironing out the teething difficulties like proper data entry by the beneficiaries, software compatibility, connectivity etc, we are ready to role out these facilities to more corporate clients.

What strategies do you use to reduce claims ratio, which is over 100 per cent in India?

TPAs have their challenges in controlling the claims ratio on their own, because the claims ratio is a factor of the premium charged, product features and the incidence of ailments. Our role is focused on verifying the genuineness of the claims, negotiating reasonable expenses with the hospitals etc. In addition, we analyse the data and give feedback to insurance companies so that they can decide the product and pricing. In addition, we have administrative measures like allowing only reasonable expenses towards consultant charges, introduction of packages etc. Going forward, we will be giving feedback to insurers on Diagnostic Related Group (DRG) based costing as a tool to estimate the cost of claims.

But DRG works in systems which have established clinical pathways. How can it work in Indian healthcare industry which does not have established clinical pathways?

I agree. This could be an initiative to move towards procedure-based costing from ailment-based costing. As rightly mentioned by you, it will be universally implementable when clinical pathways are established.

How has the TPA market changed over the years? What is the rate of growth of Medi Assist?

The market is expanding like never before. With so many players, the market has been fragmented; this has led to decrease in individual size, but increase in volume. The focus of TPAs has shifted from claims processing to claims management. In the last three years, Medi Assist has grown four fold.

What are the future challenges for TPAs?

Managing the high claims ratio and dealing with shortage of skilled manpower. Investments in technology, human resources and other infrastructure and the fragmented market are expected to affect margins.

A few TPAs are evincing interest in getting into insurance sector. How do you assess the impact of this trend?

I don't think that it would become a trend. Insurance is a highly specialised business. Only life and benefits brokerage firms should get into health insurance because they have client base. Why would TPAs want to get into insurance? They are two different domains.

Tell me about your latest IT transformation.

To tackle the increasing volume of claims, we have tied up with HP, which has proposed a scalable claims processing system custom built on HP industry standard servers and open source layout software. The $ 2-million-initiative will help us increase capacity, speed and quality of claims processing system and additionally, augment the suite of Value Added Services (VAS) the company offer to its corporate customers. The transformation will help us achieve a scalable, reliable transaction processing model that also ensures utmost security. The partnership means as we grow, all IT components-servers, storage, application and support are scalable. Distinct features of the partnership include flexibility of the scale-up model embraced, decision support, data analytics, data security, privacy of patient information as per HIPPA standards. We will start the project from end of this year. We will work with HP for five years.

Is there a need to re-define the role of TPAs? Should TPAs be empowered to prevent leakages, attain standardisation in clinical process/design packages?

TPAs should be looked as end-to-end healthcare solution providers, instead of being allowed to operate only as claims settlement companies. TPAs are already empowered to bring to the table the leakages. But until the hospital industry is regulated, the results will be far from satisfactory. TPAs have sufficient data to work on standardisation of process, protocols and packages.

What are the future plans of Medi Assist?

We are eyeing for a pan India presence. For that, we would open offices in 22 state capitals to service clients locally. Most other TPAs operate zonally with central offices. We would like to get into servicing social health insurance schemes of the state and central Government. Depending upon the approval of the regulators, we would like to role out more VAS.

rita.dutta@expressindia.com