Thiruvananthapuram: The health data of nearly 31.46 lakh beneficiaries under the MEDISEP insurance scheme—including government employees, pensioners and their dependents—is now being handled by two private companies, raising concerns over data security and transparency.

Although the contract, which gave preference to public sector institutions, was initially awarded to The Oriental Insurance Company, the firm subsequently sublet key operations to private entities. As a result, sensitive personal and medical data has come under the control of Family Health Plan Insurance TPA Limited and Vidal Health Insurance TPA Services.

The two third-party administrators (TPAs) are responsible for processing insurance claims and empanelling hospitals under the scheme. Concerns have also been raised that, driven by profit motives, they are frequently rejecting treatment claims submitted by employees and pensioners.

The government had initially decided to prioritise public sector companies and avoid the direct involvement of third party administrators, with the aim of preventing potential data leaks. However, the Oriental Insurance Company went on to assign the operational responsibilities of the scheme to private entities, including firms in which major hospitals hold shares.

Even though the tender clearly favoured public sector institutions, the government has so far not intervened in the handling of this sensitive data by private companies.

Beneficiaries lose access to Insurance Ombudsman
Under the MEDISEP scheme, beneficiaries who do not receive treatment will no longer be able to approach the Insurance Ombudsman with complaints. Instead, the government has put in place a three-tier grievance redressal mechanism.

There are indications that this change may have been made under pressure from the insurance company and this three-tier system has struggled to resolve a large number of pending complaints within a reasonable time frame.

At the same time, beneficiaries do have the option of directly approaching the Consumer Disputes Redressal Commission. This right was established through a ruling of the State Consumer Disputes Redressal Commission, which dismissed an appeal filed by The Oriental Insurance Company.