Third-party administrators (TPAs) have complained to the Competition Commission of India (CCI) against government-owned insurance companies forming a cartel and abusing their dominant market position in planning a TPA outfit of their own.
An early resolution, however, appears unlikely.
Analysts expect a protracted battle. CCI received the complaint on Monday, and is expected to begin consultation with various stakeholders soon.
"I do not wish to say anything on the issue," CCI chairman Dhanendra Kumar told Hindustan Times.
TPAs, typically stationed in hospitals, are usually the only point of contact between the patient and insurance firms. They carry out administrative tasks on behalf of insurance companies and settle claims for patients who present a valid health insurance card.
The four PSU insurers — National Insurance Company, New India Assurance, Oriental Insurance and United India Insurance — have invited proposals from companies to form a joint venture for their yet-to-be-floated TPA.
General Insurers Public Sector Association of India (Gipsa), the association of these four companies, will be the nodal body for forming this TPA.
Independent TPAs said the move will sound the death knell for the fledgling industry, which was mid-wifed by Insurance Regulatory Development Authority (IRDA) for efficient intermediation of claims.
Private insurance companies such as ICICI Lombard, Bajaj Allianz, Star Health and Max Bupa have already set up their own TPAs.
PSU insurers said inefficient service delivery by the 27 existing TPAs saddled them with a commercially unviable claims settlement ratio of 115 per cent, and forming a common TPA was one way of cutting costs.