E-Meditek TPA’s registration cancelled for irregularities

The Insurance Regulatory and Development Authority of India (IRDAI) has cancelled the registration of E-Meditek TPA (third party administrator) for a host of irregularities including empanelment of fake hospitals. A TPA functions as an intermediary between an insurance provider and the insured in the health insurance business.
“The ‘Certificate of Registration’ of E-Meditek insurance TPA stands cancelled with immediate effect and E-Meditek TPA shall cease to do the business of TPA,” IRDAI said in its order issued on Thursday.“However, it may continue servicing the existing health insurance policies based on the discretion and direction of the respective insurers for a period not exceeding three months from the date of this order (January 10). No insurer shall entrust servicing of new policies or servicing of new lives under the existing group schemes / policies to E-Meditek TPA,” the regulator stated. “All insurers who are having agreement with E-Meditek TPA shall immediately take such alternative steps including appointment of another TPA,” IRDAI’s member, non-life, P J Joseph, said. “E-Meditek TPA shall, reconcile and close the accounts with concerned insurance companies and network providers, if any,” he said.
“From the inspection observation, it is observed that E-Meditek TPA, had not only enrolled the hospitals which are not in existence but also claims were shown to have been settled for the treatment taken in such hospitals,” it said. “The submissions of the TPA that it has taken appropriate steps in 2013 itself are not acceptable, as it is established that payments referred in ‘Charge 3’ were made even after 2013 and that the investigation carried out by the insurer confirmed non-existence of hospitals at the time of the payments. It is therefore concluded that the payments are made fictitiously to the non-existent hospitals,” the regulator stated.
Gurgaon-based E-Meditek has 7 million registered members, relationships with 24 insurers, more than 10,000 health providers and a host of other partners, and international alliances, according to its website. The insurance regulator also found serious financial irregularities at E-Meditek.
IRDAI carried out an onsite inspection of E-Meditek during November 2017 after a complaint from a whistleblower. Following this, its registration was suspended by the regulator on March 20, 2018. E-Meditek challenged the suspension in SAT (Securities Appellate Tribunal). SAT stayed the operation of the IRDAI order on March 23, 2018 with a direction to give an opportunity of hearing.
Following this, E-Meditek TPA gave its submissions. On examination of submissions, IRDAI found that E-Meditek TPA violated various provisions of the ‘lnsurance Act, 1938’ and regulations/ circulars/ guidelines issued by the lRDAl. The regulator issued a ‘Show Cause Notice’ to E-Meditek in October 2018 on the various irregularities. A personal hearing was held in December 2018 which was attended by representatives of E-Meditek.
“All the insurance companies that have engaged the services of E-Meditek TPA shall submit an action taken report to ‘General Manager (Health)’, lRDAl, Hyderabad in respect of the above directions within three months from the date of this order,” the regulator said in its 31-page order. “Considering the nature and dimension of fraudulent activities committed by the TPA, the authority reserves the right to take any other action as deemed fit,” it said.