Public sector health insurance companies lack proper verification checks and controls, resulting in multiple defaults, including multiple settlement of claims, overpayment of sum insured, incorrect assessment of allowable claim amount, irregular payment on transplant and others. Huh.
This has come to the fore in the Comptroller and Auditor General’s (CAG) audit report on ‘Third Party Administrators in the Health Insurance Business of Public Sector Insurance Companies’ tabled in Parliament on Friday.
There are 32 general insurance companies doing health insurance business in India. Of these, four are public sector general insurance companies (PSU insurers), including The New India Assurance Company Limited (NIACL), United India Insurance Company Limited (UICL), The Oriental Insurance Company Limited (OICL) and National Insurance Company Limited (NICL). ) Are included.
Data analysis by audit revealed that NIACL and UIICL have settled claims more than once on different dates though policy number, insured name, beneficiary name, date of hospitalization, illness code , the name of the hospital and the disease were the same.
As seen from the database, the audit pointed out 792 cases of multiple settlements (Rs 4.93 crore) in NIACL and 12,532 cases (Rs 8.60 crore) of multiple settlements in UIICL.
Further, during audit at NIACL, it was observed that the claims settled for policyholders exceeded the Sum Assured and Cumulative Bonus in 139 retail claims, indicating an overpayment of Rs 33 lakh.
The audit report said that in UIICL, the claims paid were more than the sum insured in 2,223 claims involving Rs 36.13 crore, which included group claims. For group policies, there is a provision in the policy for such overpayment on the sum insured through ‘corporate buffer’.
However, the utilization of buffer or available balance of buffer and utilization etc. was not indicated in the claim processing sheet/verified note.
The report said TPAs are required to conduct mandatory investigation of claims as per the service level agreement, but out of 2,735 sample claims in NIACL, UIICL and OICL, 562 claims (of Rs 40.46 crore) do not include investigation reports.
The audit report pointed out that the systems and procedures for internal audit/ health audit were inadequate and the number of audits conducted was negligible as compared to the total number of claims fixed/ settled against the target.
As per the audit report, “During the three financial years ended March 2019, 659 audits of claims processed by TPAs were conducted by health audit teams constituted by PSU insurers and pointed towards recovery of Rs 14.30 crore, however, PSU The insurers have so far recovered only Rs 6.06 crore.”
Further, it has also emerged that all the four PSU insurers have incurred losses in the health insurance portfolio in all the five years from 2016-17 to 2020-21.
The total loss of four PSU insurance companies has been recorded at Rs 26,364 crore during 2016-17 to 2020-21.