Nearly all general insurers in India are working jointly in a bid to fix rack rates for common surgical procedures such as cataract, hernia, appendicitis removal, and angioplasty.
The insurers number 31 out of 33 (excluding Agriculture Insurance Company of India) and they have joined hands too with 26 third-party administrators (TPAs) in the endeavour.
While hospitals will still need to agree to the recommended tariffs, general insurers are confident of pushing through the standardised rates with most hospitals, reported Times of India.
This bid for parity and fair pricing is being driven by the IRDAI, General Insurance Council and insurers. The General Insurance Council, an association of insurers under the aegis of the regulator, has formed a committee to prepare a preliminary list of common surgeries. Over time, the committee hopes to make their rack rate list more comprehensive by adding more players.
“Some of the smaller insurers and TPAs may not have the same bargaining capacity or clout as some of the bigger names. So, IRDAI felt that it does not make sense for a hospital, for one treatment, to charge 7-8 different rates depending on the insurer/TPA — so it has asked us to work on a common rate applicable to all,” said Mr M N Sharma, secretary-general of the Council.
Insurers argue that arbitrary pricing by private hospitals is hurting patients and insurers. A fairly common cataract operation results in bills varying from INR25,000 ($349) to INR350,000 — depending on the hospital, treatment, doctor and implant lens. For more complicated surgeries like a kidney transplant, the price range is INR500,000 to INR1.25m.
The four government-run general insurers — New India Assurance, National Insurance, United India and Oriental Insurance — already have a common price list for medical procedures under the GIPSA (General Insurance Public Sector Association).
IRDAI has decided to extend the public sector insurers’ model to private insurers and TPAs.