AS MANY as 45.6 lakh beneficiaries of Ayushman Bharat Central and Punjab – Mukh Mantri Sehat Bima Yojana (AB-MMSBY) have no health insurance coverage in the state in the past six months, thanks to the premature termination of the contract with the insurance company during the previous government’s regime.
The Punjab government’s health department’s “immediate termination” order came in December 2021, leaving recipients, in need of medical attention, to fend for themselves or simply drop out of treatment halfway through.
The health department prematurely terminated its contract with SBI General Insurance, chosen by the Punjab government to administer the health insurance scheme, citing that “the company was taking more than the stipulated 15-day period for payment to hospitals or that it was penalizing the hospitals unnecessarily. The termination of the contract took place on December 29, 2021, when the Congress led by then Chief Minister Charanjit Singh Channi ruled the state. OP Soni was then Minister of Health otherwise the agreement would have ended on August 18, 2022.
The ministry neither penalized the company for these erroneous actions nor served it with a blacklisting notice. The termination of the agreement came when the insurer was bleeding due to claims exceeding the premium. The deal was terminated just days before the code of conduct was put in place for the 2022 assembly elections. Otherwise, the company was expected to have an estimated loss of Rs 600-700 crore until the end of the contract . In accordance with the contract, the company’s financial responsibility ends on the date of termination itself.
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Premature termination of health insurance; beneficiaries without coverage in Punjab
Henceforth, this additional burden of Rs 600-700 Crore will have to be borne by the incumbent government. Like today, the government’s liability is in the range of Rs 249 crore even when most private hospitals and public hospitals like GMCH-32 have stopped entertaining patients in Punjab under this scheme.
“The contract provided for a 30-day notice of termination to the company before serving the final notice of termination. However, the department was in a hurry to terminate the contract with immediate effect without making any further arrangements for these 45 lakh families. Even if we set aside several hundred million dollars of loss for the treasury, can we ignore the fate of so many deserving patients who die because the dialysis or radiotherapy facility is no longer available to them? asked a government official.
The government sought the advice of a private lawyer before proceeding with the termination. Interestingly, the minister at the time and departmental officials preferred to obtain legal advice from a private lawyer rather than from the government’s general counsel and his battery of lawyers. The legal opinion cost the public treasury Rs 2 lakh.
Permission was not sought from the Department of Finance to terminate the contract. Had this been done, FD would have disagreed as it potentially placed an additional burden of nearly Rs 600-700 crore on the Treasury and benefited the insurance company by an equally large amount. As soon as FD learned of the immediate notice, they lobbied the health department to clarify that it was not a permanent layoff. But at that time, the company had taken a position that since the agreement had been terminated, it would not be responsible for any financial liability accrued after December 29.
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On Monday, Chief Minister Bhagwant Mann had a meeting with health department officials and discussed the issue. We learn that the officials informed the CM of the whole question. “We owe several public and private hospitals and hospitals in Chandigarh about Rs 250 crore. The CM was informed that the government should pay for this liability. The government will allow this to ensure residents continue to receive treatment. Future tenders would be called now,” a source familiar with the discussions said.
He added that soon after the contract was terminated, the department re-tendered and received the most suitable offer at triple the price of the earlier premium. While the contract with SBI-GIC was made at Rs 1050 per beneficiary, in the new tenders, it received the premium offer at Rs 3000 plus. However, the Ministry of Finance raised objections and the tender was never awarded. Even at the time of termination, it was assumed that the new premium will be at least double the current premium.
The Center and the State had to pay the company a premium of Rs 458.45 crore to insure 45 lakh beneficiaries at a premium of Rs 1050 each. As the premium was to be paid on a semi-annual basis, the government had paid a premium of Rs 142 crore. As the Center pays 60% of the bounty of 14 lakh families, listed as BPL by the Centre, its share was around Rs 100 crore in the total bounty. While the Center only pays the premium for 14 lakh families, the state has extended the scheme to 45 lakh families and renamed the Ayushman Bharat scheme as Ayushman Bharat – Mukh Mantri Sehat Bima Yojna. With the termination, even BPL families have no insurance.
OP Soni, when contacted, said: “The business was not waking up. There were complaints that they did not pay claims. I held at least 10 meetings with them. There were protests across the state. The Indian Medical Association (IMA) was organizing a series of protests. I had no personal interest. I had people’s interests in mind. I wanted them to take out insurance. When the company did nothing, it was best to terminate the contract.
A spokesperson for SBI, in an email to The Indian Express, said, “We at SBI General Insurance have always been committed to our customers and are well positioned to meet their needs. Since our onboarding as an official insurer under the Ayushman Bharat Sarbat Sehat Bima Yojana (AB-SSBY) scheme in the state of Punjab in August 2021, we have ensured that all claims have been handled and up to standard. of compliance until the effective date of termination of the contract by the National Health Agency, Government of Punjab. We have settled all claims resulting from hospitalization no later than the effective date of termination of the contract and for which claims and the appropriate supporting documents have been submitted to us. We have successfully fulfilled all of our obligations under the contract during and after termination. »