Farm Distress Mission reports massive short coming in Rajiv Gandhi Health Insurance scheme, suggests reform to curb corruption and effective functioning
Dated 9th MAY 2016
Maharashtra Govt. high power task force to address agrarian crisis and prevailing farm distress has submitted shocking report of malfunctioning and financials misdeeds in state sponsored mega health scheme which covered covered around 2.5 crore families giving free treatments up to Rs.1,50,000/- per for more than one thousand critical illness ,alleging unfair trade practices and irregularities leading pecuniary loss of more than Rs. 500 Crores to the Treasury of Govt, Task force chairman and farm activist Kishor Tiwari alleged in the detail complaint lodged with Mah.CM who is also Chairman of Rajiv Gandhi Jeevandayee Arogya Yojana Society (RGJAY Society) ,responsible Govt. body .
It is alleged that functioning of “RAJIV GANDHI JEEVANDAYEE AROGYA YOJANA” (RGJAY) HEALTH INSURANCE SCHEME since last 3.5 years is willful & deliberate Violations of provisions of Competition Act, 2007 as the Tender/ Contract conditions substantially modified later on to benefit private Third Party Administrators appointed by Insurance Company contrary to the IRDA Regulations as well as IRDA & Insurance Act, without calling fresh tenders and disregard to free & transparent tender process, causing pecuniary loss of more than Rs. 500 Crores to the Treasury of Govt. of Maharashtra, due to unilateral extension of old contract without calling fresh Tenders and there is large scale shortcomings, irregularities and corrupt practices being adopted in the functioning of “RAJIV GANDHI JEEVANDAYEE AROGYA YOJANA” (RGJAY) HEALTH INSURANCE SCHEME since last 3.5 years, virtually benefiting & protecting the Third Party Administrators appointed by the National Insurance Company Ltd, working hand in gloves with officials of Public Health Department, managing the affairs of the RGJAY Scheme as well as RGJAY Society, causing loss of more than Rs. 500 Crores in last 3.5 years .
In last six months after close / deep scrutiny of the RGJAY documents viz. Tender Document/ Contract viz-a-viz the terms & conditions set therein , Task force in the report alleged that the clearly demonstrate that the entire RGJAY Health Insurance Scheme have been crafted in the most causal manner and functioning in the most irregular & highly corrupt manner, against the interest & the welfare of State & needy poor families. Though, apparently the RGJAY Health Insurance Contract shown as issued to PSU- National Inssrance Company Ltd (NICL) , but behind the back entire show is managed by private TPAs who have been benifitted largely due to hepty commission gaining as result of substantial saving TPAs could cause to NICL. Hence, private TPAs are managing & governing this RGJAY Health Inssurance Scheme to their fullest advantage due to hand in gloves with Officilas. The quantum of such loss caused to Govt of Maharashtra is more than Rs. 500 CRORES, which ought to have been saved, if officials of State managing RGJAY had applied their mind. But it is surprising that for the reasons best known to them, they have miserably failed to analyse the shortcomings in RGJAY & thus failed to protect the interest of State & poor needy families. Hence, the entire role of all responsible officials must be examined & the angles of parting Commission by TPAs need to be enquired into by Vigilance/ ACB or CBI Agency. Similarly, now while renewal of the contract; it is imperative that the vital suggestions made herein below may please be considered in the larger interest of the state exchequer and the public at large,report added
hence VNSSM farm task force urged CM to institute high level Vigilance/ ACB Enquiry in the matter of these gross irregularities & corrupt practices adopted, right from the beginning, as the non-transparent tender process, unilateral finalization of agency & award of contract of “Rajiv Gandhi Jeevandayee Arogya Yojana” (RGJAY) under the RGJAY Society formed by Govt. of Maharashtra, to favor Third Party Administrators (TPAs) to gain huge amount due to faulty & favored health insurance policy conditions, virtually depriving poor & needy beneficiary families in the Maharashtra covered under RGJAY.
VNSSM also suggested vital points for improvements & demand to modify RGJAY Scheme to adopt free & fair competition to save substantial revenue loss also by simplifying the conditions of RGJAY in the interest of needy poor families.
VNSSM details of the complaint are as under :
1. In the year 2011-12, “Rajiv Gandhi Jeevandayee Arogya Yojana” (RGJAY) was formulated under the RGJAY Society formed by Govt. of Maharashtra to provide Critical Health Cover to BPL & APL families in the State. This is one of the major welfare program of State Government in which total 2,16,88,340 BPL & APL families @ 4.5 members per family to cover almost 85% of population – Total 9,75,97,000 citizens of the state.
2. First Phase of “Rajiv Gandhi Jeevandayee Arogya Yojana” (RGJAY) was initially launched in 2011-12 on 02.07.2012 in the Seven (07) Districts of Maharashtra State viz. Gadchiroli, Amravati Nanded, Solapur, Dhule, Raigad & Mumbai City – Suburban benefiting 49,03,140 families @ 4.5 members per family to cover 2,20,64,130 citizen in the Seven Districts of State. Total amount of annual premium paid for Rs.183,45,52,980/- (Rupees One Eighty Three Crores + ) was paid
3. But when we analyzed the contract conditions and as well as the no. of hospitals and beds made available in the year 2012-13, it is shocking that the conditions were modified illegally & unlawfully to favor agency and only 119 hospitals having 40 average bed capacity each were only impaneled . It Means for 49,03,140 BPL & APL families @ 4.5 members per family to cover 2,20,64,130 citizen in the Seven Districts of State, only 4760 beds were made available. Thus, lacs of poor patients in such BPL & APL categories were virtually denied the benefit of the scheme due to such lower no. of hospitals & the beds.
It is further shocking that the amount of claims settled in the year 2012 was less than 50% of the amount of premium paid. This ultimately helped TPAs of Insurance Company to gain Crores of Rupees.
It is also relevant to understand that though, apparently the RGJAY Health Insurance Contract shown as issued to PSU- National Insurance Company Ltd (NICL) , but behind the back entire show is managed by Private TPAs who have been benifitted largely due to hefty commission & compensation being gained as result of substantial saving TPAs could cause to NICL. Hence, private TPAs are managing & governing this RGJAY Health Insurance Scheme to their fullest advantage due to hand in gloves with Officials, from day no one.
4. It is most surprising that later on, the scheme was extended to favor same agency & same set of private TPAs , without calling fresh tenders, in the most illegal & unlawful manner, the contract was extended to entire State of Maharashtra on 21.11.2013 to cover all remaining 28 districts in the state, to benefit additional 1,64,51,264 BPL & APL families @ 4.5 members per family to cover additional 7,40,30,688 citizen in the additional 28 Districts of State. Thus, additional premium of Rs.615,53,85,197/- (Rs 615 Crores +) was paid.
5. But, when we again analyzed the functioning & contract conditions and as well as the no. of hospitals and beds made available in the subsequent year 2013-14, it is again shocking that the conditions were modified illegally & unlawfully to favor Insurance Company & private TPAs Agency and contrary to the provisions of IRDA Regulations which statutorily mandates about the PAN India inclusion of the Hospitals without any restrictions on numbers in the interest of beneficiaries, only 215 hospitals having 40 average bed capacity each were empanelled. It means for 2,16,88,340 BPL & APL families @ 4.5 members per family to cover 9,75,97,000 citizen in all 35 Districts of State, only 8600 beds were made available. Thus, lacs of poor patients again were virtually denied the benefit of the scheme due to such lower no. of hospitals & the beds. The amount of claims settled was less than 75% of the premium paid. This ultimately helped private TPAs of said Insurance Company to gain Crore of Rupees, their being no Competition due to unilateral extension contract on the terms the best suiting to said Insurance providers as well as largest beneficiary private TPAs.
6. Further analysis of the scheme & its contract conditions and as well as the no. of hospitals and beds/ facilities made available in the subsequent years 2014-15 & 2015-16 , it is again shocking to know that the conditions were modified illegally & unlawfully to favor same agency & same set of private TPAs, without calling tenders, in the most illegal & unlawful manner, the contract was extended without any competitive Bids or transparent procedures due to involvement & hand in gloves of the officials virtually working for protection monetary interest of said set of private TPAs . As of now only 388 hospitals having 40 average bed capacities each. Means for 2,16,88,340 families @ 4.5 members per family to cover 9,75,97,000 citizen in the 35 Districts of State, only 15,600 Beds were made available, which is just less than 0.02 % of the total no of beneficiary under the said RGJAY. Thus, hundred lacs of poor patients again were virtually denied the benefit of the scheme due to such lower no. of hospitals & the beds. The amount of claims settled was less than 50% of the high premium paid to the tune of more than Rs. 875 CRORES per annm . This ultimately helped the same set of private TPAs of Insurance Company to gain Crores of Rupees . This all happened contrary to the provisions contented in IRDA guidelines as well as Health Insurance Regulations, 2012 framed by IRDA under the Authority & Powers of IRDA Act as well as Insurance Act.
7.Now, if it is allowed to be continued further, the loot of the State treasury will scale up-to Rs.1000 Crores in coming 2 years.
8. The entire functioning of the RGJAY Scheme is highly irregular, non transparent, corrupt & proceeding in unlawful & illegal manner, there being no competitive & transparent tender process & Bids and the provisions of the Competition Act, 2007 as well as IRDA Act have been violated grossly and on the other hand State Govt. has lost Rs. 500 crores in last 4 years, due to faulty & irregular process adopted by the Oofficials of Public Health Dept. managing RGJAY Scheme & RGJAY Scheme Society in the most casual style & manner, without application of mind & in the highly collusive manner, making it a fit case to be handed over to Vigilance/ ACB or CBI like independent Agencies.
9. It is pertinent to note that said RGJAY Health Issuance Scheme for most needy BPL & APL families is under the State controlled RGJAY Society. But it is further shocking to note that the officials of Public Health Dept. managing RGJAY Scheme & RGJAY Scheme Society in the most casual style & manner, did not cared to call & convene meeting of RGJAY Society in the last 24 months of which Hon’ble CM is the President/ Chairman.
10. It is observed that only Contract employees are managing the affairs.
11. The Insurance Policy Contract conditions have been set such as the Hospitals are controlled by TPAs through “Aarogya Mitra” , appointed by TPAs to benefit only them. Distt. Coordinators have been made contract employees from the year 2015. Hence, they lost interest. Regional Coordinators are helpless as TPAs governing entire show.
12. As provided in the IRDA Regulations, every beneficiary BPL & APL families must be issued Identity Cards so that they can get advantage of the Scheme but no ID Cards have been issued so far. Similarly list of Empanelled Hospitals, PAN India must be made available in public domain to give maximum advantage to the needy citizens covered under the RGJAY Scheme but in facts, no such list is available even with the Insurance Company. The Website of RGJAY is so complex & difficult to access by common man, given the fact that most of the beneficiaries are illiterate from BPL & APL families.
13. To save on account of premium, a free & fair competition be allowed by way of all participative public tender process without any cartel. Hence, all players in Public & Private Health Insurance Sector all over India be allowed to participate in RGJAY scheme Tender.
14. The present bottle neck & failure is due to involvement of private TPAs. RGJAY must not entertain any TPAs as they only supporting hands of Insurance company , protecting their own interest. Hence, no TPAs be allowed to enter into nay Tripartite contract or Agreements with empanelled Hospitals as TPAs are virtually blackmailing Hospitals .
15. "Aarogya Mitra " must not be on the Rolls of Insurance or TPAs roll. They must be under the control of RGJAY Society tobe paid by Empanelled Hospitals where they are posted so that they can help benefices in real sense. Because at present, they are only acting as "Aarogya Enemy" only discouraging patients.
16. The provisions contended in IRDA Regulations for Health Insurance which stipulate that the PAN India Hospitals across the Nation be allowed to treat the beneficiaries of the policy. Hence in this RGJAY Health Insurance Scheme, no of Hospitals must be increased to at least 5000 PAN India, without any restrictions, as no of beneficiary BPL, APL & poor farmers families are more than 2,25,00,000 families and no of citizen covered under RGJAY is more than 9.85 CRORES. Means, more than 85% population of the Sate is covered under RGJAY Scheme.
17. District Coordinators & Regional Coordinators must be taken on the RGJAY Society Role so that they can work securely.
18. Hospital Impalement must be in accordance with IRDA Regulations & in the domain of RGJAY Society , as at present only 388 Hospitals are there & that too impaneled by TPAs or their agents. It is the violation of IRDA Guidelines as well as Regulations, governing the Health Insurance Scheme as per the IRDA Act as well as Insurance Act.
19. As provided in the IRDA Regulations, every beneficiary BPL & APL families must be issued Identity Cards so that they can get advantage of the Scheme. Similarly list of Impaneled Hospitals, PAN India must be made available in public domain to give maximum advantage to the needy citizens covered under the RGJAY Scheme.
20. There must be coordination between DHO or CS in every Distt to better implement RGJAY and Dy. DD of PHS should work as coordinators.
CM has urged by VNSSM to look into this most serious issue immediately to save state revenue as well as the interest of poor needy patients the worst suffering under mis-management of RGJAY Scheme . I,, therefore, most earnestly solicit your immediate kind attention & intervention in matter to expedite the inquiry & action in order to save the poor & farming community. Task force chairman also requested CM to grant Personal Hearing for detailed presentation in order to demonstrate the facts pertaining to above so that we can contribute for corrective steps in the inverts of & to protect poor families & dying farmers.