Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (PMJAY) and Mukhyamantri Amrutam (MA) schemes in Gujarat have been affected following the accumulation of insurance claims and termination of contracts with Oriental Insurance Company Ltd (OICL) and Bajaj Allianz General Insurance Company.
Hospitals refusing to accept beneficiaries of these schemes until the backlog is cleared led Remya Mohan, director of the state’s national health mission and additional CEO of PMJAY-MA, to terminate contracts with the two insurance companies, which were responsible for processing claims under both plans.
According to estimates provided by Gujarat health department officials in charge of PMJAY-MA, nearly Rs 472.2 crore of claims submitted to the two insurance companies since July 1, 2021 under the government schemes remained. due April 20.
Claims worth around Rs 1,330 crore received under the two schemes as of April 20, OICL received around Rs 740 crore and Bajaj Allianz GIC received around Rs 590 crore. “Fifty-seven percent of the Rs 740 crore was cleared by OICL (approximately Rs 422 crore) and Bajaj Allianz cleared 74% (approximately Rs 436 crore) of the Rs 590 crore claims it received at April 20,” the official said.
The termination notices were issued for failure by the two companies to comply with agreements they signed with the National Health Agency (SHA). According to termination notices dated February 28 and signed by Mohan of Gujarat NHM, the administration was “very disappointed” with the companies’ services. The state will “no longer use your services” from April 1,” the letter read, seen by The Indian Express.
On February 21, a fine of Rs 4.44 crore was imposed on OICL and Rs 13.13 crore on Bajaj GIC by the state “which is a trigger for non-compliance with KPIs (Key Performance Indicators ),” the termination notices note.
The reviews add that “this inefficiency” by part of the two insurance companies to achieve basic key performance indicators (KPIs), particularly with regard to the time to settlement of claims (TAT), “even after the The nearly eight-month completion of the policy not only brought down the name and reputation of the program, but also forced many hospitals to stop accepting patients from the program.
The PM-JAY guidelines issued by the National Health Authority (NHA) for hospital transactions state that the TAT for payment of claims should be 15 days for intrastate claims and thirty days for interstate claims. “That was not met, where we were seeing TATs of sometimes 50 days, 75 days and even 150 days and payment was still pending. We started to receive a lot of grievances and we also imposed penalties, but despite the penalty, there was no improvement, and so the dismissal notices were issued. When we were operating the program in insurance mode (before July 2021), the TAT was around 35 to 40 days,” said Dr. Shailesh Anand, Managing Director in charge of PMJAY-MA program implementation in the state. . The average TAT as of February 16 was 41 days for Bajaj Allianz GIC and 65 days for OICL.
Dr. Bharat Gadhavi, chairman of the Association of Hospitals and Nursing Homes of Ahmedabad (AHNA), said that several “small and mid-range private hospitals” in Ahmedabad had stopped accepting beneficiaries from PMJAY-seekers. MA last year, following which the association had taken steps with public health. department in December 2021. Ahmedabad’s claims fall under the jurisdiction of the OICL.
“When we asked the insurance company why they weren’t paying, they said the government wasn’t paying us the premium. When we asked the government, they said they had paid the full premium. So the dispute was between the companies and the government,” added Dr Gadhavi.
OICL State Coordinator KB Khinchi said that as of May 10, OICL had settled claims worth Rs 532 crore but declined to comment on the reason for the delay.
According to a state health official, the delay of the TAT could be due to “lack of capacity in terms of manpower”, especially with regard to the OICL. The official added that Bajaj Allianz GIC, after being asked to justify the delay from TAT, “the company in 10 days has almost cleared payments worth around Rs 100 crore”.
Meanwhile, an Ahmedabad-based private hospital administrator, on condition of anonymity, accused the OICL of raising “unnecessary” questions and pushing to “find reasons to reject claims”. “Complaining should start from the moment a patient is diagnosed, but to diagnose, you would have to carry out tests or do the general investigation to come to the diagnosis. So the consultation would be chargeable, and there is no clarity of the government’s part on this. But the insurance company would say “we got a complaint that you billed a patient, so we’re issuing a show cause notice”, probably because they thought that by dismissing those claims , they (insurance companies) can reduce their outgoing amount (toward payment to hospitals/facilities),” the admin said.
“(If) the outgoing claims payments by the insurance companies are greater than the premium received, the insurance companies will suffer a loss and in order to reduce their losses, they are adopting different processes,” said an official based in New Delhi, aware of developments.
For the sum of Rs 5 lakh per family per year, the state government pays a bonus of Rs 2,177.10 per family to the two companies. Being a centrally sponsored program, PMJAY sees the Center and the states share the cost in a ratio of 60 to 40, while for MA, the state government bears the cost of the premium.
In November 2020, when the tender was launched, bids were solicited from “interested and eligible insurance companies to cover 69.80 lakh of PMJAY, MA and MAV eligible beneficiary family units” in Gujarat . The state had 65.04 lakh families with active MA, MAV and PMJAY cards at the time. The state is then divided into two “nearly equal areas in terms of target families”. By February, 1.15 crore Ayushman cards had been issued in Gujarat, far exceeding the estimated expected beneficiaries cited in the tender.
The state has recorded 27,44,780 authorized hospitalizations under AB-PMJAY since the program began in September 2018, the second highest of any state and UT in all India after Kerala (34,56,393 hospitalizations allowed), according to a response to a question from Lok Sabha in February.
According to an auditor from the state health department, Gujarat used to see an average of claims worth Rs 1,000-1,200 crore under the two pre-Covid schemes with a tendency to rising each year, thanks to the increase in the number of beneficiary registrations from one year to the next. However, the two years of Covid-19 saw a decrease with an “annual average of Rs 900 crore in claims due to hospital closures and postponement of planned surgeries”. “We are again seeing an increase due to people getting their pending procedures completed,” the auditor added.
In the meantime, the State has launched a new call for tenders in search of insurance partners for the two schemes. However, the notice of termination implies that both companies can still apply and win the tender, as the companies have not been blacklisted from applying for the tender. Additionally, despite notices of termination stating that the two companies will only operate until March 31, the state government has granted both companies “an extension until May 15 to operate,” Dr. Anand said. .
Apart from Gujarat, Punjab, where SBI General Insurance is the insurance provider, appears to be the only other state where the “premature termination” of PMJAY’s maintenance contract has occurred.
“With so many beneficiaries at stake under these two schemes – around three crore of them across Gujarat – this is not a situation where we can take knee-jerk action and end businesses overnight. and name a new one the next day. Also, blacklisting is an extreme step and OICL is a PSU,” Dr. Anand added. “The blacklist opens a flood of litigation and also makes the company ineligible to apply for other government tenders,” another official said.