Soon, a rating system for hospitals

You have health cover but are not sure how a hospital will ‘treat’ you. This is set to change thanks to a new rating of hospitals the IRDA is planning, similar to what is being done by the credit information bureau in the banking industry.

The Insurance Regulatory and Development Authority is putting in place a system that will rate hospitals, unlike credit scores that evaluate bank customers.

“We have asked health insurance providers to identify each and every hospital dealing with cover-based treatments with a unique identification number so that their dealings in charges/claims can be traced,” M Ramprasad, Member (Non-life), IRDA, told Business Line here.

IRDA, along with its arm, the Insurance Information Bureau, has already launched a hospital registry. Now, there are 26,000 hospitals in the country that offer treatment to patients with health cover in this registry. “There is wide disparity in the charges levied by hospitals for a single ailment. For example in the case of cataract, it ranges from ₹10,000 to ₹40,000 and above. The idea behind tapping information with the unique hospital identity number is to find abnormalities or any pattern in wilfull high charges for patients with insurance,” Ramprasad said. “Like the Cibil rating in banking, we are working on giving some ratings to these hospitals,” he said.

A categorisation of hospitals on the basis of charges levied/ailments treated would be taken up.

“This helps in easily identifying fraudsters and black-listing of fraudsters either by the insurers or patients,” he added.

As there is no regulator for hospitals or a way to authenticate them, the initiative of IRDA would help fill the vacuum and address the concerns of health insurers on inflated claims.

Though the regulator did not have a complete data on the incidence of fraud in health claims, according to industry experts, it could be up to 30 per cent of claims.

“The problem for us is definition of fraud in insurance as normal Indian Penal Code definition may not be entirely applicable. The possibility of defining insurance fraud is being explored with the help of legal experts,” the IRDA member said.

A project to develop fraud analytics is also on the anvil. “We have called bids for the projects and nine bidders have responded. The process of examination of the bids is underway. In about three months from now, the work is likely to take off,” the official said.

COMMENT NOW