Premium hike looms as HMOs meet providers over tariff review

Organisations could face hikes in the premium paid on workers’ health insurance cover in the coming weeks as Health Maintenance Organisations (HMOs) seek negotiations with healthcare providers over tariff terms that suit both parties.

Some enrollees are also likely to face transfers to other hospitals or lose coverage if their premium fails to adjust to possible raise in tariff expected from the new agreement between HMOs and providers.

The National Health Insurance Scheme (NHIS), a body that regulates health insurance affairs, has intervened in the ongoing dispute between the duo over poor tariffs and debts, asking the health providers to lift the ultimatum to cease the provision of services to enrollees from January 31 and create room for dialogue, BusinessDay learnt on Thursday.

A 20-man committee of equal representation on both sides has been set up to come up with a common agreement on the tariff by February 7 as well as harmonise other areas of disparities.

Leke Oshunniyi, chairman, Health and Managed Care Association said the fresh tariff demanded by providers could result in premium hikes of more than 100 percent if applied.

He however hopes that the dialogue will open opportunities for better negotiations which might have little or no impact on enrollees while acknowledging the plights of providers concerning the impact of inflation on the costs of operations.

“The executive of the NHIS, Professor Nasir Sambo called us to a meeting on Tuesday in Abuja, both HMOs and providers and he said we should go and agree on what should be the proper premium. So, we are hoping that we will be able to reach a better deal for our millions of enrolled. And if they have to pay more, then it would be a minimal increase,” Oshunniyi told BusinessDay.

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The Health Care Providers Association of Nigeria (HCPAN) had threatened last week to cut off services to enrollees under private insurers, citing that losses were accruing to members due to poor tariffs paid and a pile of debts owed.

The association lamented that the agreement earlier made with HMOs was no longer feasible in light of the soaring cost of medical goods, noting that the review drafted in 2020 can merely keep provider facilities surviving.

“General inflationary trends are the norms of the abnormal now and were indeed unbearable in the last quarter or 2021. No one has thought it fair to review the reimbursement mechanism and valuation for the private health sector practitioners,” Adeyeye Arigbabuwo, national president, HCPAN said speaking at a briefing in Lagos.

He noted that the mass migration of health workers abroad has worsened their ability to retain health workers for an average of four months, for instance, with facilities now compelled to pay up to five times more than usual.

Due to this, they are demanding that HMOs adjust existing contracts to meet the association’s benchmark, mandating that payments should no longer be owed in excess of 30 days.

However, some HMOs who spoke with BusinessDay said the performance of insurers does not apply to all as some providers already get tariffs higher than the proposed minimum.

Oladotun Adeogun, managing director at Hallmark Health Services, an insurance firm in Lagos said more than 50 percent of providers under its portfolio saw their tariffs reviewed in 2021, explaining that calls for review come often along with regular notifications on new cost of medical consumables.

Also, she noted that the high inflation rate in the country has had a general impact that needs careful analysis for a win-win solution that can make for a workable health insurance system.

“Currently, there are some hospitals that will no longer be accessible to all because of the tariff reviews. Some private hospitals could take in more enrollees like general hospitals before. But, we will have to cut some people off because of the tariff… The only thing I expect from hospitals is that they should be fair to us.” Adeogun told BusinessDay.