Medical Insurance in India

The Central Mumbai District Consumer Disputes Redressal Forum recently directed the Oriental Insurance Company to pay Rs. 64223/- that had been deducted from the hospital reimbursements made by it. The refusal to pay was based on the fact that the amounts for which reimbursement was claimed -the fees charged by the surgeon, the anesthetist and the operation theater; together with Rs.293/ -charged for cologne, blade and a blanket -were “too high. The company claimed that their policy promised to reimburse only “reasonable customary and necessary” expenses. Held that the company had not proved that the fees charged by the hospital were not reasonable, customary and necessary.

In India, mere production of the hospital bills is usually proof sufficient that the insured had incurred that expense.

It is completely plausible that the fees charged by the subject doctors, may have been excessive. In India, in a single area it is common to find different facilities charging varying amounts for similar services. An ultrasound test can cost anywhere between a few hundreds to thousands, or is even free. A specialist in nuclear medicine, a friend of mine, who I visited for a medical check up, asked me if I had insurance coverage. If so, he said, I should go ahead and perform a few tests, but if not, no need, because they were really quite expensive and unnecessary. In the cities, if the patient has medical insurance, he is invariably subjected to a battery of tests and spends weeks admitted in the hospital, after which he is generally recommended treatments which would not have been done, if he was not covered.

To prevent arbitrary charging of fees for medical services, we should, like the US, design CPT Codes. CPT (current procedural terminology) codes are numbers given for different types of medical services and supplies provide all over the country. What this means to the US citizen is that the insurer is going to reimburse the treatment provided under that code at a fixed rate. This generally results in physicians and medical providers restricting their fees to the amounts prescribed under the CPT codes. Similar coding procedures in India, with variations for rural and urban areas; would, at the least, prevent overcharging for services rendered, although it would not prevent hospitals and doctors from prescribing unnecessary treatments and providing medical supplies even for very minor complaints merely to collect insurance benefits, which is what happens in the US. In the US, insurance companies do not squeal “overcharged”, they scream “lack of medical necessity.”

Insurance law in the US is very highly developed and the processes extremely sophisticated and streamlined. Both providing insurance and claiming it, is seriously, big business. Medical treatment is usually provided by companies formed by physicians and providers who get the patient to assign insurance benefits in their favor. These companies then send in their claims to the insurer and hire law firms to sue the insurer, if the claims are not paid.

In India, insurance law has a long way to go. Here, insurance cover is mainly taken by people in bigger cities and metros. Insurance companies still project themselves as benign entities aiming to protect the innocent consumer. However, it will not be long before the real face of insurance emerges-that of a giant Midas, whose ‘protective’ touch turns everything into money.