The recent decision of United India Insurance Company, Oriental Insurance Company and National Insurance Company and their respective TPAs (Third Party Administrators) to form a Cartel and impose rate cutting on their empanelled hospitals has rattled the hospitals. Vidarbha Hospitals Association which is always at forefront to protect interest of Health care service providers has now raised cudgels against this cartelisation.
These insurance companies sell health insurance to needy citizens. By forming such cartel, the beneficiaries will have no choice but to go to hospitals who have agreed to a very minimal tariff as ordered out by their TPAs.
It is learnt that the cartel of Indian companies and TPA’s in a sudden manner have unilaterally de-empanelled those hospitals who did not agree to rate cutting to tune of 50-80% of old ongoing rate list. Such sudden de-empanelment intimation with no prior notice has affected the ongoing care to scores of beneficiaries in many hospitals who are grouped under concerned TPA’s.
VHA has stated that rather than any kind of judicious enhancements either based on wholesale price index or consumer price index, the cartel has rendered injustice to affected hospitals with total disregard to principles of natural justice by suggesting rate list which is at least 50-80% less as per previously ongoing tariff. VHA has further sought details on the yardsticks applied and justifications for such tariff reductions.
It has baffled the hospitals to note that few TPAs/ insurance companies have blatantly formed a “Cartel” which is against the spirits & tenets of Indian Constitution. Few insurance TPAs openly joining hands to form a cartel and arm twist all hospitals to either agree for a very subsidized packages or forsake empanelment of all cartel members defeats the basic purpose of promoting quality health care uniformly to all health care beneficiaries. Such kind of cartelization will result in poor quality care and less choice for services.
VHA has stated that such cartel formatting goes against the Competition Act, 2002 which aims at fostering competition and at protecting Indian markets against anti-competitive practices by enterprises. The Act prohibits anti-competitive agreements, abuse of dominant position by enterprises, and regulates combinations / mergers with a view to ensure that there is no adverse effect on competition in India. The Act prohibits any agreement which causes, or is likely to cause, appreciable adverse effect on competition in markets in India or affects quality of care.
General Insurance Public Sector Association (GIPSA), the umbrella organization for four public sector insurance companies had already earmarked a specified rate list for their empanelled hospitals. The package rates suggested by the cartel is far less that even GIPSA tariff, VHA has alleged.
VHA now intends to approach Competitions Commission of India, Insurance Regulatory and Development Authority of India, General Insurance Council and General Insurance Public Sector Association of India (GIPSA) to seek justice for private hospitals before knocking doors of judiciary.
