The majority of the financing, about 75 per cent, is provided by the Government of India (GOI), while the remainder is paid by the respective state government. State governments engage in a competitive bidding process and select a public or private insurance company licensed to provide health insurance by the Insurance Regulatory Development Authority (IRDA). The technical bids submitted must include a number of elements as per GOI requirements. The insurer must agree to cover the benefit package prescribed by GOI through a cashless facility that in turn requires the use of smart cards which must be issued to all members. This requires that a sub-contract be arranged with a qualified smart card provider. The insurer must also agree to engage intermediaries with local presence such as NGOs, MFIs, etc. in order to provide grassroots outreach and assist members in utilizing the services after enrolment. The insurer must also provide a list of empanelled hospitals that will participate in the cashless arrangement. These hospitals must meet certain basic minimum requirements (e.g., size and registration) and must agree to set up a special RSBY desk with smart card reader and trained staff. The list should include public and private hospitals.
The financial bid is essentially an annual premium per enrolled household. The insurer is compensated on the basis of the number of smart cards issued, ie., households covered. Each contract is specified on the basis of an individual district in a state and the insurer agrees to set up an office in each district where it operates. While more than one insurer can operate in a particular state, only one insurer can operate in a single district at any given point in time. The hardware and software specifications laid down by GOI imply inter-operability across districts and states.
The operation of the system involves three stages, enrolment, hospital transactions and monitoring.
Enrolment in RSBY (Rashtriya Swasthya Bima Yojana)
An electronic list of eligible BPL households is provided to the insurer according to a pre-specified format. The list is posted in each village prior to the enrollment and the date and location is publicized in advance. Mobile stations are set up at local centers (e.g., public schools). These stations are equipped with the hardware required to collect biometric information (fingerprints) of the members of the household covered and to print smart cards with a photo. The smart card along with an information pamphlet describing the scheme and the list of hospitals is provided on the spot once the beneficiary has paid the 30 rupee fee. The process takes less than ten minutes.
Three individuals must be present at each enrollment: A district-level, state government officer is present and must insert his own, centrally-issued smart card to verify the legitimacy of the enrolment. (In this way, each enrollee can be tracked to a particular state government official). In addition, a smart card vendor and insurance company representative must be present. At the end of the day of enrolment, the list of households issued smart cards is sent to the state government and centralized at the district level.
Transactions at Hospitals
The smart card entitles its bearer to a list of pre-specified in-patient services in the second month following enrollment. So, for example, someone enrolled in the month of February can use the card at designated hospitals as of April 1st of the same year through March 31th of the following year. (Provisions exist for pro-rata premium payments to the insurance company in the event of partial year enrolment subject to a minimum of six months.)
The smart cards are nominally paid for and belong to the GOI.
The transaction process begins when the member visits the participating hospital and his or her card is swiped. If a diagnosis leads to a procedure, the appropriate prescribed package is selected in the software menu. Upon release, the card is again swiped and the pre-specified cost of the procedure is deducted from the 30,000 rupee total on the card. A receipt is printed and provided to the member.
Information on the transactions that take place each day at each hospital is uploaded through a phone line to a database on a district server. A separate set of pre-formatted tables are generated for the insurer and for the government respectively. This allows the insurer to track claims, transfer funds to the hospitals and investigate in the case of suspicious claim patterns through on-site audits. Governments are able to monitor utilization of the program by members and to some extent, begin to measure the impact of the program. (Rigorous M&E; methods are being designed and may be supported by the World Bank.) Periodic reports would be made publicly available on the internet and through published reports.