Four ways India’s new digital health claims system will change health insurance

    India is expected to have a functional insurance claims exchange – the National Health Claims Exchange (NHCX) by December 2023.

    In August 2023, 29 insurers offering health insurance and 18 TPAs undertook to integrate into the National Health Claims Exchange (NCHX) and successfully tested the creation of ABHA (Ayushman Bharat Health Accounts) – the unique health IDs assigned to every Indian citizen.

    These 47 entities (insurers and TPAs) make up for 99% of India’s health insurance sector, so undertaking a change to the way health claims are processes is quite a herculean task.

    But what kind of changes will the new health claims system bring about?

    1. Faster and cheaper claim settlement

    The goal is to sharply cut down on the time spent and cost incurred for claims processing by linking the health insurance ecosystem with the NHCX – a digital public health infrastructure.

    This new system via the NHCX will require hospitals to follow standardized claims filing procedures using which claims will be easily readable with no need for a human to manually go through dozens of pages of claims documents. Once the documents are digitally validated, the claim can be quickly processed.

    2. Less fraudulent claims

    With the system of unique IDs for patients, doctors, nurses and even claims, claims will have multiple verification points which will make it difficult for fraudulent claims to make it through.

    3. Outpatient (OPD) coverage

    As of now, no insurance companies are able to provide OPD coverage because of the incredibly high costs associated with processing OPD claims which are often of meagre amounts – it’s simply unviable to do so.

    With the NHCX, the costs associated with processing OPD and IPD claims are incredibly low and this would encourage insurers to come out with new products focused on the OPD avenue.

    4. Increased insurance penetration

    The average Indian largely pays their outpatient expenses out of pocket to consult a doctor, any associated tests and medication. In such a scenario, most would find it futile to pay for an inpatient only insurance, and it’s harder still for insurance advisors and consultants to convince them to do so.

    With NHCX’s ability to bring OPD under the umbrella of cashless health claims, the country should see an increase in penetration of health insurance – a much needed step to bolster India’s efforts in making ‘Insurance for All by 2047” a success.


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