Health insurers see value in in-house settlement of claims

Rising dissatisfaction in claims settlements (medical bills of insurance customers) has forced health insurance companies to re-look their models for claims settlement.
Health insurers used to outsource their claims settlement to agencies called Third Party Administrators (TPAs). This was done to save costs as well as time and help insurers focus on their core business.
The much-vaunted economy and speed of operations that they were supposed to bring has not happened. Now, after a couple of years of unsatisfactory experience with these agencies, insurers are back to doing these things on their own. Going in-house is the name of the game now.
Health cards not reaching in time, delay in cashless issuance, delay in payments of claims are some of the common complaints that policyholders face while settling claims through TPAs, say experts in the insurance industry.
For Future Generali, customer complaints have gone done by 80 per cent after they moved to in-house claim settlement models in November 2010.
“Customer service is the most sensitive touch point for any insurance company. It is a core activity of the company which ideally should not be outsourced. Also, there is far more accountability with in-house claim settlement units as they offer end-to-end solutions for health insurance policies,” says Mr T.A. Ramalingam, Head-Underwriting, Bajaj Allianz General Insurance.
DIRECT CONNECT IMPORTANT
Agrees Mr Sanjay Datta, Head-Customer Service, Health and Motor, ICICI Lombard General Insurance, “It is important for us to have a direct connect with our customers.”
Insurance companies also say that the claims can also be settled faster if done in-house.
The claims settlement time has gone down by 50-70 per cent (depending on case to case) for ICICI Lombard since it shifted the process in-house in 2008.
“Now, the decisions are taken directly by us and even dispute resolution is much quicker as we deal with the clients and hospitals directly,” said Mr Shreeraj Deshpande, Head, Health Insurance, Future Generali Insurance.
“In-house claims settlement is faster as there is no loop in between the customer and the insurer. The industry benchmark is about 6-8 hours to approve a cashless request, whereas the approval from our in-house claims settlement team takes only 40 minutes due to our image-based process, adds Mr Ramalingam.
ADMINISTRATIVE COSTS
Settling claims in-house may result in higher administrative costs as the insurance companies have to undertake huge groundwork, tie up with hospitals, and maintain a 24x7 helpline, among other things. However, in the long run experts feel that it would help insurance companies bring down premiums.

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