India’s national health insurance sector

The national insurance companies of India which also cover health are a big scandal. A few years ago the policy holders used to make direct payment to the companies hoping to get help during their rainy days. But it is truism that the companies brought them more rain than shine, more tear than cheer. A series of deceptions and lies have of late made insurance companies even more “dubious”. The first is Good Health Policy. The second is Citibank as an intermediary at a hefty service charge. The third and worst, is Third Party Authorization. The fourth is “Insurance is the subject matter of “Solicitation“, as seen on the websites of the insurance companies. The last is reminiscent of what India’s “red light areas” should be displaying – that prostitution is a matter of solicitation – though I am not sure if the unfortunate lot in this profession enjoy this self-righteousness.

That there is a lot of sleaze in the health insurance sector and it is a den of corruption and malfeasance is stating the obvious. The main issues which should exercise the policy holders and the public at large include the following:


  • After the introduction of Third Party Authorisation through which the national insurance companies have abdicated their responsibility what are these companies supposed to be doing?
  • Though they continue to collect the premium from the insured; how much money is misappropriated by the companies, the third parties to whom they have outsourced their services, the middle-men and other hangers-on?
  • The nexus between some hospitals and the third parties.
  • The involvement of the politicians.

Enquiries with a number of policy holders of different companies reveal that all of them have been victims of prevarication, delay and deception by the insurance companies. One policy holder said in an email:

I had trouble with Oriental Insurance Company in getting my mediclaim. I was admitted to [–] for treatment of prolapsed disc in my spinal chord. The insurance company did not contest the issue of hospital where I had admitted myself. The insurance company had re-contracted with Medicare TPA Services (I) Pvt. Ltd. That company rejected my claim stating that I had undergone two surgeries earlier for the same disease. So they stated that I was ineligible to get my claim. I pointed out that I had stated clearly in my original application that I underwent two surgeries earlier in [–] and [–] for the same problem. Still TPA services refused to accept my claim. The doctor reduced his fees by nearly 50%. I paid the amount (around Rs.75000/) in cash to the hospital. After coming back to [–], I wrote to Oriental Insurance Co. and warned them that I would approach the consumer court. Some friends informed me that I could approach the ‘Ombudsman’ before I approach the consumer court. Anyway I sent a lawyer notice to Oriental Insurance Co. and TPA services that I am going to approach the consumer’s court. The insurance company agreed to settle my claim. It took me nearly six months to get back my claim.

On the website,, the posts on the TTK include the following. The contents are not reproduced here for want of space.

Worst TPA ever

Worst service, Much delay, No response, Not worth

The worst TPA for medical insurance – TTK

Insurance … for trouble…!

More recently, there was an important case of a healthcare scandal involving the same third party. The details reproduced here from a letter sent to TTK Healthcare TPA P. Ltd., Chennai, by a policy holder are a telltale. For anonymity the details of the individuals involved are withheld.

On August 28-30, 2008, I had phoned the customer care of TTK Healthcare TPA P. Ltd., Chennai, to confirm that a specific hospital in Chennai is a network hospital. Even after repeated requests to check and respond, the response was “no”. This was wrong and misleading. The hospital informed me later that it is indeed a network hospital. On September 8, it suggested that I sign the pre-authorisation form for cashless hospitalisation, which I did.

On September 11, I informed the customer care that my [–] covered by the policy is admitted to the above hospital for angiography followed by surgery; and requested expeditious action for cashless hospitalisation. On September 12, I received a reply from the “ccbackend” that it has not received the pre-authorisation request form from the hospital. This was wrong and misleading.

On September 13, I received the following email from the “ccbackend”: “We regret for the inconvenience caused to you. The Pre Authorization Status of [–-] has been rejected.
Note: Insufficient clinical data received, hence cashless not possible.”

If you had not received the pre-authorisation request form from the hospital as made out in your email dated September 12, you owe an explanation as to how you rejected the pre-authorisation status, that too in less than 24 hours. If the reason for your rejection was “insufficient clinical data” you owe another explanation as to how you arrived at this conclusion in less than 24 hours and why you failed to get sufficient clinical data.

On September 12, I made repeated phone calls to the customer care to get a definite reply on the status of the pre-authorisation. When the person who attended the last call said “I am only a call-centre executive”, I asked him to connect me to the branch manager. But the branch manager refused to come online. I made repeated calls on September 13 also. The replies were similar. This again shows how irresponsible and insensitive you are to customer care.

On September 12, I sent a copy of my email of September 11, to the members of the Board of Directors of the TTK Healthcare. I did not get a reply. This clearly shows the insensitivity to, and lack of accountability and concern for, customer care even at the highest level.

Since you are the party to which the health care, including and especially, cashless hospitalisation has been outsourced for speedy and timely care of the insured, by your outright rejection of the cashless hospitalisation request you have not only trampled upon my right but also raised a larger issue of your deleterious role in the health care of the insured. For, if you wanted any clarification you could have easily contacted me on phone and/or by email, or better still, pursued the matter with the hospital.

When I mentioned to the hospital about your email rejecting cashless hospitalisation, the staff informed me that one of your doctors had phoned and told that the disease is “pre-existing.

If your reference to “pre-existing” is to the pre-authorisation form which the [–] where I sent [–] first for consultation) had faxed you on July 31, 2008, that again is wrong and misleading. For on August 3, I had informed you that because of your callousness and the delay in processing the claim form I did not send [–] again to the [–]. Such being the case, there is no question of any “pre-existing treatment” as [–] was not admitted to the [–]. In any case, “pre-existing” is also covered by mediclaim as evident from the letters of the insurance company. That apart, the [–] informed me later that it had claimed Rs. 40,000 from you and you had approved Rs. 20,000 and intimated the same to the hospital. At that time [–] requirement was a CT scan and the only “clinical data” available was a report on [–] X-ray. Despite this, your acceptance of the pre-authorisation request by this small local hospital and rejection of the request by the highly reputed [–] hospital clearly shows the arbitrary and whimsical nature of your decisions. It also raises serious doubts about the competence and commitment of the doctors on your panel and whether the panel exists to help the insured, or to make profit for you at the cost of the health and life of the insured.

Rather than being a facilitator of health care for which the insurance company has engaged you through third party authorisation your callous response when your cooperation was most needed has had a crushing effect on me and my family. The hospital staff thoughtfully asked: “you may be able to deposit the required money in case of rejection of your request by TTK; what about a poor patient who depends on insurance for hospitalisation?”

Your email dated August 6 had given me the impression that in the light of my earlier emails you had taken measures to improve your functioning. But your rejection of the claim form sent by the hospital has proved me wrong. Your unhelpful and harmful posture calls for public action for bringing transparency, accountability, prompt, proper, and friendly customer service in national insurance companies, exposing agencies such as yours to which their service has been outsourced by getting a White Paper placed in Parliament on, among other things, (a) the role of insurance companies in the health care of the insured in the context of the thousands of crores of rupees of public money with them; (b) break-up of the spending of this money in the context of the insured; (c) the extent to which third party authorisation has been a bane to the insured; and (d) corruption and sloth in the insurance companies and third parties like you.”

Copies of the above letter were sent to (1) the Chairman, Insurance Regulatory and Development Authority, Government of India; (2) Minister of Health and Family Welfare, Government of India; and (3) the Chairman and Managing Director of the The New India Assurance Co. Ltd.That none of them cared even as much as acknowledge the letter is a revelation of how horribly irresponsible those in positions of power can be.

The mainstream media may not like to make a story of this sordid state of India’s health sector as many of the media groups may be belonging to the corporate sector which patronise companies like the TTK. So where do we go from here?

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