Imagine a world where filing a health insurance claim is as easy as ordering a pizza online. We’re not quite there yet, but initiatives like the health claims exchange are steering us in the right direction.

In December 2023, Dr Basant Garg, Addl. CEO and Mission Director, of Ayushman Bharat Digital Mission (ABDM) at the National Health Authority (NHA), expressed optimism about India’s ability to demonstrate a functional health insurance claims exchange. This sentiment reflects the growing importance of digital solutions in the healthcare sector, especially regarding insurance claims management.

The government’s vision of “Insurance for All” underscores the need for concentrated efforts to boost health insurance penetration while ensuring affordability. A recent report by the National Insurance Academy highlights a concerning statistic – over 400 million individuals, approximately a third of the population, lack health insurance due to various factors such as lower penetration rates, inadequate coverage, and escalating healthcare expenses.

Currently, there is a lack of standardization that contributes to complexity and can result in higher costs for consumers. Introducing a regulator could help standardize practices, promote transparency, and ultimately reduce costs, making health insurance more affordable and accessible to a broader population.

Recognizing these challenges, the National Health Authority (NHA) has developed a national Health Claims Exchange (HCX) to facilitate the interoperability of health claims. HCX serves as a vital protocol for exchanging claims-related information among different stakeholders, including insurers, healthcare facilities, and providers, and eventually the beneficiaries. This initiative aligns with the government’s broader agenda of leveraging technology to enhance healthcare services and improve the overall health insurance ecosystem.

HCX brings efficiency and transparency to the complex world of health insurance claims. By replacing paper-based systems with a digital platform, HCX enables real-time access to claims-related information through advanced technologies like cloud computing. HCX reduces the timeline by standardizing data format, procedure details, etc. This move towards digitalization is particularly crucial in the healthcare sector, benefiting insurance and reinsurance industries alike.

The key features of the proposed HCX include digital submission, data security through advanced encryption, and interoperability for seamless data exchange between different systems. The primary objective of HCX is to enhance the claim settlement process, improve efficiency and speed, ensure data accuracy, and ultimately achieve cost savings in health insurance.

Drawing from international experiences, the ‘twin peaks’ system of regulation implemented in the UK in 2013 provides valuable insights. This system replaced the Financial Services Authority (FSA) with two new regulatory bodies – the Prudential Regulatory Authority (PRA) and the Financial Conduct Authority (FCA). The PRA focuses on promoting safety and soundness in insurers, while the FCA regulates their behavior and the integrity of financial markets. This regulatory framework ensures safety, stability, and fairness for customers, essential principles for a robust health insurance system.

Additionally, the World Health Organization (WHO) has provided guidance on Universal Health Coverage (UHC) principles. These include health benefit maximization, fair distribution, fair contribution and financial risk protection, and accountability. Countries seeking to achieve UHC must navigate critical decisions such as expanding priority services, including more people, reducing out-of-pocket payments, and balancing trade-offs between coverage and cost-effectiveness. Fair choices based on these principles are essential for building a sustainable and inclusive healthcare system. UHC includes OPD and IPD while insurance policies including PMJAY takes care of only IPD. India does have a free drugs and diagnostics policy to support essential drugs and diagnostics. A line may also be added to cover this dimension as well.

Through standardization of communication and procedures, automation, and real-time updates, HCX aims to streamline the entire claims-handling process. It enables interoperability and data exchange, increases patient engagement, and enables data-driven decision-making, ultimately improving healthcare outcomes. 

HCX is closely aligned with the Ayushman Bharat Digital Mission. By facilitating data exchange and enhancing efficiency in claims handling, it contributes significantly to achieving the mission’s goals of improved public health insurance coverage and reduced fraud.

While HCX holds immense promise, it also faces challenges such as ensuring data privacy and security, user adoption and training, and regulatory compliance. To enhance the functionality of the Health Claims Exchange (HCX), it’s crucial to focus on these key aspects. Firstly, HCX can be augmented by enhancing integration and interoperability with diverse health systems and adopting advanced technologies like AI for streamlined processes and heightened security for smooth implementation. Secondly, a comprehensive Information, Education, and Communication (IEC) strategy is essential, including targeted awareness campaigns to educate stakeholders about HCX’s benefits and functionalities. Additionally, providing participative tools, incentives, and training programs can encourage active engagement and effective utilization of HCX. Finally, strict adherence to security and privacy protocols, aligned with the Digital Personal Data Protection Act (DPDP Act) 2023, which is about to be operationalized, is imperative to safeguard sensitive healthcare data across all levels of HCX operations adherence to regulatory standards making it imperative for stakeholders to comply with these aspects.

Views expressed by Dr. Sabine Kapasi, Co-Founder and MD, Enira Consulting Pvt Ltd, and Dr. Hardik Sankhla, Partner, Enira Consulting Pvt Ltd

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