This is because hospital categorisation or gradation cannot be done easily, says the Council in an affidavit

Mumbai : The General Insurance Council, which represents 25 non-life insurance companies, on Thursday, told the Bombay High Court that it is not possible for its members to come out with a pre-packaged compensation in the policies on the basis of sum insured and on the type of hospital.

“We cannot introduce pre-packaged rates for various ailments in insurance policies because hospital categorization or gradation cannot be done easily”, said GIC in an affidavit.
The court was hearing a PIL filed by activist Gaurang Damani, detailing hardships faced by mediclaim policy holders.
Categorisation of hospitals can be done by the Union government and the states on the basis of prescribed criteria
by coming out with a legislation, GIC further said.
The court had earlier asked Insurance Regulator and Development Authority (IRDA) to come out with pre-packaged
compensation for ailments covered under the medical insurance policies on the basis of sum insured and type of hospitals.
Asserting that there are practical difficulties in implementing pre-packaged rates for ailments in policies, GIC said they need time to re-think on the issue.
Accordingly, a bench headed by Justice Mohit Shah gave three weeks to GIC to reconsider incorporating pre-packaged rates in the policies.
The GIC said there is a need to regulate healthcare and standardise the services, including quality of treatment, and improving infrastructure.
“It is primarily the responsibility of the Union of India in regulating the hospitals and categorising them on the basis of various criteria by bringing out a comprehensive legislation,” the GIC affidavit said.
The General Insurance industry alone is not responsible and cannot give effective implementation of the High Court guidelines (on pre-packaged rates for ailments in policies), the GIC said.
Monitoring of hospitals for implementation of the High Court directions was not in the hands of insurance industry but was the prerogative of IRDA, it said.
GIC further said prescribing a pre-packaged rate for a particular ailment would defeat the fundamental principles of indemnity in both ways.
For instance, it is possible that a patient who has incurred more expenses for an ailment might get only the limit prescribed in the packaged rate.
It is also possible that in case of another patient, who has incurred less amount for the same ailment due to lesser complication or hospitalisation, the hospital may charge the maximum packaged rate declared in the policy, the GIC said.
Specifying packaged rate is not within the purview of the insurance companies and the general insurance industry strongly believes that declaring packaged rates in policies would not serve the interests of policy-holders.
Earlier, IRDA had said in an affidavit that a fixed packaged rates in a policy for ailments was a matter of ‘policy design and product features’ and was within the domain of insurance companies.
The petitioner argued there was a provision in the Clinical Establishments (Registration and Regulation) Act to appoint a healthcare regulator to regulate the hospitals. Yet, IRDA has not appointed such an authority, he said.
In the interest of consumers and policy-holders, a regulator should be appointed, he urged the court.


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