Preferred provider network

1. Preferred Provider Network (PPN)
Operation Manual
N Banchur
DGM ( Health) &
Chief Risk Officer
Head Office

2. Purpose of the Manual
 To document the objectives and scope of PPN
 To spell out the structure for operation of PPN
 To provide the model for evaluating the outcome
of PPN
 To create a common platform of four PSGICs
for taking up various activities of PPN – selection
of cities, procedures, determination of rates,
process for empanelment and related activities

3. Objectives of PPN
 To enable effective claims management in health
insurance
 To bring cost of treatment to affordable levels for all
sections of society
 To provide a platform for negotiating rates with providers
 To standardize processes to facilitate implementation of
PPN
 To develop a sound data base to measure , monitor and
control of healthcare delivery to policy holders
 To achieve these objectives- quality of healthcare not to
be compromised and in the name of aggregation
extremely special circumstances not to be ignored.

4. Structure of Authority
GB
Apex
Committee
Central Committee
Regional Committee
City Committee

5. Governing Board
 PPN to function within the overall direction & control of
Governing Board of GIPSA
 The Governing Board has the power to redefine the
extent of authority vested within any person or
Committee under this Manual
 Governing Board has authority to direct Apex Board to
revise any of the clauses of Manual
 Governing Board has power to remove any members of
the Apex Committee or induct new members into the
Committee

6. Functional Differences of Committees
Description Apex
Committee
Central
Committee
Regional
Committee
City
Committee
Composition GM(Health) of
four Companies
DGM(Health)/ or
Scale V
nominated by
GM
RO in charge or
RM (Health) of
Flag Co+ RMs of
other 3 PSUs
An officer not <
than Scale III
selected by
Central
Committee + 3
officers each
from
Companies+ 3
officials from 3
TPAs

7. Functional Differences of Committees
Description Apex
Committee
Central
Committee
Regional
Committee
City
Committee
Special
Provisos
May be
assisted by a
team of medical
experts
comprising one
officer from
each Company
with
qualification in
medicine
Central
Committee can
take help of
Medical experts
constituted by
Apex
Committee to
assist them
Officers with
Medical
background or
sound
knowledge of
health
insurance be
inducted in
committee
Central
Committee may
direct City
committee to
seek services of
medical expert
to assist them,
if required
Meeting Quarterly Bi-monthly Bi-monthly Monthly

8. Functional Differences of Committees
Description Apex
Committee
Central
Committee
Regional
Committee
City
Committee
Quorum Three.
Participation by
VC reckoned
Three.
Participation by
VC reckoned
Three. Four members
from at least
two Insurers
Convener Selected by
rotation every
year
Elected by
members of
Committee
Flag Insurer Officer
selected by the
Central
Committee
Functions of
Convener
-Agenda, date
& venue
-Preparation of
MOM
-ATN
-Confirmed
MOM & ATN to
be sent to
Confirmed
MOM & ATN to
be sent to Apex
Committee in 7
days
-Convene
meeting
-Record &
circulate
minutes
-Orderly
organization of
meetings
-convene
meeting
-Record &
circulate
minutes to
Regional &
Central
Committee

9. Functional Differences of Committees
Description Apex
Committee
Central
Committee
Regional
Committee
City
Committee
Response Time Each GM to
confirm MOM &
ATN in 3
working days of
receipt
Each member
to confirm MOM
&ATN in 3
working days of
receipt
. Minutes etc to
be circulated
within 3 days
Powers -Modify any
provision of
PPN manual
-Selection of
cities for PPN
-Determine
number of
hospitals in
PPN
-Approve
constitution &
composition of
Regional
committee
-Determine
number of
procedures
-Empanel
hospitals
-Decide the
composition of
city committee
-Determine the
number of
hospitals taken
up for
negotiation
- Suspension of
hospitals
-Carry out
inspection of
hospitals
-Negotiate rates
with hospitals &
recommend to
Regional
Committee

10. Functional Differences of Committees
Description Apex
Committee
Central
Committee
Regional
Committee
City
Committee
Powers -De-panel
hospitals
-Monitor PPN
operation in
each city
-Decide lead
Insurer for PPN
in each city
-Prescribe
standards &
processes to
carry out
activities in
Manual
-Approve rates
for each
hospital
-Approve rate
revision
-Prescribe the
terms of
Tripartite
Agreement
-Monitor the
progress of
PPN across
cities
-Resolve
dispute
between TPA &
hospital
- Examine
delays in
payment by
TPA/Insurer
and
recommend
corrective
actions to
Central
Committee
-At least officers
of 2 Insurers be
present in
negotiation
-To have vigil
that hospitals
comply with the
terms of
agreement in
letter & spirit
-Monitor
implementation
& inform any
significant
development to
RC.

11. Functional Differences of Committees
Description Apex
Committee
Central Committee Regional
Committee
City
Committee
Powers - Prescribe access to
different types of
rooms depending on
SI
-Ensure periodic
meeting of Regional
Committee
--Prescribe
standards &
processes to
categorize hospitals
--Stipulate
exceptions for rate
components,
complications & co-
morbidity
-Review the
performance of
PPN in the city
every six
months
-TPAs co-opted
are to facilitate
the process
necessary for
formation &
implementation
of PPN
- TPAs to
provide
Technical inputs
to City
Committee
-TPAs not be
involved in
decision making
process

12. Common Questions answered
Question Answer
Who decides whether a city will be
under PPN ?
Apex Committee
What are the factors considered for
including a city under PPN ?
-Health Insurance Premium & outgo in
relation to total premium.
-Possibility of cost saving due to such
expansion
How do we determine the number of
hospitals in PPN ?
-The number of hospitals in PPN could
be % of total hospitals or an absolute
number
-No uniform formula
-Geographical dispersion across the
city and dispersion across hospitals
-View of Central & Regional
Committees to be given to Apex for
approval

13. Common Questions answered
Question Answer
Whether the number of hospitals can
be increased or decreased ?
Yes can be increased or decreased
due to operational exigencies with
recorded reasons
How do we determine the number of
procedures in PPN & who decides?
-The procedures are to be decided
based on past experience and trends
in healthcare costs
-Both surgical & medical procedures
may be included
-While inclusion of any procedure,
clinical protocol may be prescribed
-Central Committee to review number
of procedures and recommend
addition or deletion
How to empanel hospitals in cities
where already PPN is operational ?
- Requests for empanelment to be
made to Convener of City Committee

14. Common Questions answered
Question Answer
-Convener to maintain the list of such
requests duly numbered in a register
-To be placed before City Committee
to decide whether to go ahead with
negotiation of rates
What activities to be carried out before
empanelment of a hospital in PPN ?
-Inspection of hospital on the facilities
available to be carried out
-TPAs co-opted in the City Committee
to carry out the inspection
-During hospital inspection official of
at least one Insurer to be present
-City Committee may seek services of
agencies like NABH for technical
support & inspection

15. Common Questions answered
Question Answer
-Based on inspection, hospital to be categorized
-If satisfied with the infrastructure and facilities
for the procedures, rates may be negotiated
-Hospitals where infra ,safety standards, quality
and facilities are lacking, no negotiation to be
done
How do we add hospitals to PPN ? -Number of hospitals in each city is decided by
Apex Committee
-If number of hospitals in panel is equal or
exceeding, requests may be kept in abeyance till
opportunity arise due to exit or de-panelment
-Once opportunity arise, City Committee to
recommend eligible list in order of merit to
Central Committee through RC for approval.

16. Common Questions answered
Question Answer
-If hospital is with dubious records or
suspected supported by documents,
the reasons to be furnished to RC.
The RC to consider recommendation
of CC and refer to Central Committee
for approval
- Only on approval of Central
Committee further negotiation can be
done
What is the procedure for
empanelment of hospitals where PPN
is launched first time ?
-To insert notice in websites of four
Companies & also in leading dailies in
the city to invite applications from
interested hospitals
-Notice to stipulate last date
-All applications to be received online
through portal

17. Common Questions answered
Question Answer
-The co-opted TPA members to collect list of all
hospitals in terms of admissions for four companies
for the immediate past year
-The list to be given to City & Regional Committee
-TPAs also to give inputs on dubious practices of any
hospital
-Once applications are received & inputs from TPAs
are taken, City Committee to screen the hospitals in
terms of admission handled & recommend the list of
hospitals for rate negotiation along with rejection if
any with reasons
-Hospital inspection to be completed before any rate
negotiation

18. Common Questions answered
Question Answer
-The recommendation of City Committee to
be approved by Regional Committee
-Regional Committee, to record reasons in
case it differs from City Committee
-All records to be maintained by City
Committee for scrutiny by Central or
Regional Committee
What is the procedure for rate
negotiation ?
-On getting approval for rate negotiation
city Committee to negotiate based on
popularity of hospital
-At least four out of 12 nominated by
Regional Committee be present in such
meeting
-No negotiation without that

19. Common Questions answered
Question Answer
-In case rate negotiation held up for lack of
adequate officers, matter to be escalated to
Regional and Central Committee
-For new hospitals without previous billings,
categorization norm to be decided by
Central Committee
- Depending on category, location,
comparable rates of similar hospitals,
competence of medical team of hospital,
expected growth of hospital, City Committee
to recommend to Central Committee
What is the procedure for
determining rates ?
-City Committee to go for rate negotiation
with historic data of rates of the hospital for
each procedure

20. Common Questions answered
Question Answer
-The historic data to take note of rates charged
under reimbursement mode
-The committee to determine the rates for each
procedure based on protocol & schedule of
charges of hospital
-The lesser of the two would be the basis for
discussion & on this lesser rate maximum discount
to be negotiated
-Rates negotiated to be anchored to SI as
determined by Central Committee
-Rates recommended to be approved by Central
Committee
-Any modification by Central Committee to after
discussion with City & Regional Committee
-Rates to be valid for two years

21. Common Questions answered
Question Answer
How to deal with co-morbidity and
open ended rate components ?
-For implant devices like stents, it may be
left open
-Exceptions to be provided for co-
morbidity and other complications
-Committee to ensure hospital does not
abuse this open ended ness & periodic
data to be obtained for these to see
whether it is as per medical trends.
-Aberrations to be brought to notice of
Regional Committee
How do we de-panel hospitals ? -To be done as per IRDA guidelines
-City to inform Regional Committee any
deviation of rates or agreed contractual
clauses
-Hospitals to be put in watch list

22. Common Questions answered
Question Answer
-In case of serious lapse on contractual commitments or
fraud or unethical practices, City Committee may
recommend suspension
-Regional Committee may on merit authorize suspension
-Formal letter to be sent by Flag Insurer to hospital
-In case Regional Committee is satisfied based on records
regarding de-panelment, it can send it to Central Committee
who in turn to Apex Committee for approval.
-On approval Regional Committee to send a letter to hospital
as to why de-panelment should not be done for their reply
within 15 days
-Only letter to be written, no personal discussion
--Regional Committee on receipt of reply may either
recommend depanelment or revocation of suspension or
continuance or extension of suspension for specified period

23. Common Questions answered
Question Answer
-If the Apex Committee revokes suspension of any hospital,
it has to be communicated to hospital within 24 hours by City
Committee
-In case of depanelment or any other, the hospital will be
informed immediately
-City Committee also to intimate all TPAs about de-
panelment
-De-panelment may be done also without suspension ,if
required

24. Common Questions answered
Question Answer
What is the procedure for agreement
with hospitals ?
-Agreement to be tripartite-four
insurers on one side, all TPAs on
another & hospital on third side
-Agreement as per IRDA guidelines
-Terms of agreement to be approved
by Central Committee
-City Committee is responsible to get it
signed & delivered to all
-Regional committee to authorize
specified officer to sign
--Agreement to incorporate a medical
audit provision
-- Agreement to have a clause for
passage of volume, trade or any other
discount to insurer
-- Duration of agreement 2/1 year/s

25. Common Questions answered
Question Answer
What is the procedure
for rate revision ?
-Rates preferably be valid for 2/1 year/s
-City Committee on approval of Regional
Committee to negotiate 3 months before expiry
-City Committee to be guided by (a) number of
hospitalizations during the agreement period-
cashless & reimbursement
(b) Number of deviations occurred
© attitude and approach of hospitals to PPN
(d) The increase in rates charged by other
hospitals not in PPN during the period
-City Committee to send recommendation to
Regional and Regional to Central for approval
-- Central Committee to convey decision within 10
working days.

26. Evaluation of PPN
 Central Committee to evaluate the performance of PPN hospitals once in
two months based on quarterly data collected by City Committee in
prescribed format
 Non-compliance of agreement, higher charges through re-imbursement,
admission in higher room category, abuse of open ended costs, increased
incidences of complicated and co-morbidity cases, high cost surgery etc to
be under watch list of City Committee
 City Committee also to look out for repeated instances of service related
issues, TAT, lack of standard documents like pre-auth, bill and discharge
summary, coding, non-adherance of package rates, lapses during medical
audit, abuse like over treatment,unbundling, up coding, denialof treatment,
deposits over & above package
 Central Committee on periodic inputs to take corrective actions

27. Efficacy of PPN
-- Efficacy of PPN lies in
- With better package rates
- Policy holders access to quality care at popular hospitals
- Increase in cashless utilization
--Efficacy at macro level to be examined every year for
each PPN city by comparing inter city comparison,
course corrections and sharing best practices
--Apex Committee to constitute a Committee by 1st May
every year or may give the work to an independent body
for a report within 60 days.

28. PPN Facilitation
 List of PPN to be periodically updated in
websites of Companies
 City Committee to ensure hassle free delivery of
quality healthcare to policy holders
 Where possible, help desk to be provided

29. THANK YOU