Insurance Scheme Funds Must be in Government Account

The Comptroller Auditor General’s report released on Friday has questioned why funds under the Chief Minister’s  Comprehensive Health Insurance Scheme, collected as claims by government hospitals, were not maintained in the government account. The report states that between 2012 and 2015, 150 government hospitals received a claim of Rs.625.24 crore. Of this, Rs.488.24 crore was spent as incentive to the medical team, cost of consumables and infrastructure and the balance of Rs. 137 crore was retained as of May 2015 in bank accounts by various hospitals.

It has contended that the amount should have been credited to the government account and the government would make budgetary provisions for expenses.Although the project director had maintained that a core committee comprising all government hospitals followed the guidelines issued by a government order and there was no question of contravention of the rules, the CAG termed the answer untenable and issuing a G.O. allowing hospitals to maintain a bank account was in contravention of the provisions of the Constitution and Rule 7(1) of Tamil Nadu Treasury Rules.

Extra expenditure

The report has pointed out that the government had paid an extra Rs. 7.11 crore in the first quarter the scheme was implemented. “The Health and Family Welfare Department had not included a clause that would have saved the government around Rs. 7.11 crore, the scheme had benefited the insurance company,” the report states.The Tamil Nadu Health Systems Society, which was designated to implement the scheme, had paid a premium of Rs. 183.64 crore for the first quarter in Jaunary 2012 for 1.34 crore families. However, the insurance company had issued 1.29 crore health cards to families found eligible under the scheme.

Though the State government requested the insurance company to return the balance amount, the company refused, citing  absence of such an enabling clause in the agreement regarding refund and the agreement on the premium payment was based on data furnished by the Health and Family Welfare Department.The government, in response to the CAG query, said the families that did not possess health cards were also treated under the scheme on the basis of their ration card and income certificate issued by the village administrative officers.

But the CAG has said that the reply is untenable, as in the insurance scheme offered from February 2009 to May 2011, “a saving clause was included” that the excess premium paid would be adjusted in the next quarter. The CAG team also said there was no data to support the government’s claim on the number of additional families that were treated.