In what is being seen as a significant move towards expanding health insurance coverage in the country, the convergence between the National Health Authority (NHA) and the Employees’ State Insurance Corporation (ESIC) is set to be implemented across four states in the country. The decision comesfollowing a successful pilot in two districts.

The NHA had entered into a partnership with the ESIC in the latter part of 2019. The partnership is considered as a landmark initiative towards the improvementin access to healthcare in the country. The synergy between the Ayushman BharatPradhan Mantri Jan Arogya Yojana (AB PM-JAY) scheme and the Employees’ State Insurance Scheme (ESIS) is expected to expand the provision of social security benefits in the form of cashless healthcare to insured beneficiaries under both the schemes. The convergence will enable ESIC beneficiaries to access services at PM-JAY empanelled hospitals and vice versa. This will translate to increased accessibility to healthcare services and larger choice for beneficiaries.

The Pilot and the Next Phase

A pilot was conducted in the Bidar district of Karnataka and the Ahmednagar district in Maharashtra. Following its successful completion, the learnings and experience are being applied in expanding the converged scheme to 113 districts across four states of Madhya Pradesh (except Indore district), Maharashtra (except South Mumbai area, Pune, and Kolhapur districts), and Chhattisgarh (except Raipur and Korba districts) and four districts of Karnataka namely Bidar, Chikballapur, Chikmagalur and Kodagu districts.

Close to 2.8 million ESIC beneficiary families in these districts will be able to avail cashless treatment at any of the network hospitals empanelled under PMJAY, across the country. The beneficiaries are eligible for all secondary and tertiary packages under the Scheme. After the initiative is scaled up to these 113 districts, the plan isto eventually extend its coverage across the country. Currently, 15 ESI Corporation Hospitals are being empanelled with PMJAY and going forward, the remaining ESI network hospitals will also be brought under its net.

Key Benefits of ESIS convergence and AB PM-JAY

  • ESI beneficiaries will get access to healthcare providers under AB PM-JAY
  • AB PM-JAY beneficiaries will be able to avail services in ESIC empanelled hospitals.
  • Beneficiaries of ESIC can use their ESIS card to access free treatment at AB PM-JAY empanelled hospitals.
  • Similarly, beneficiaries of AB PM-JAY can use their PM-JAY card to access free treatment at ESIC empanelled hospitals.

The convergence between PM-JAY and ESIC will leverage the established network of quality services providers under the PM-JAY along with the fixed health benefit packages. This is expected to standardise services across the two schemes. Further, it will create higher demand for health services at ESIC empanelled hospitals that may be currently underutilised. This will support in improvement of infrastructure and facilities of such facilities, via utilisation of funds reimbursed under PMJAY.

Implication of the Merger

While the merger of ESI & PM-JAY is an important step in ensuring standardization of financial health coverage in the country, there are some important practical considerations that will need to be looked into moving forward. These relate mainly to areas of:

i) Facility & scheme governance

ESIS is governed by ESIC centrally and by ESI Departments under various Ministries at the State level. In the past year, there have been discussions around the establishment of ‘State Autonomous Boards’ which would be independent of the State machinery with direct accountability to ESIC. With the merger now formally underway, it would be important to chart out the contours of accountabilities and responsibilities as they relate to governance and monitoring of the scheme at the State level. Additionally, given that ESIC runs its own facilities and State ESI departments have been running their own facilities through hybrid funding from ESIC & the State Government, the question also remains as to who would be the ultimate steward and arbiter of the scheme at a State level. This is also relevant with regard to the empanelment criteria (public vs private) under which ESI facilities would fall and how their financing would be designed over time.

ii) Centre-State financing

The continued underperformance of ESIS has been, in large part, attributed to the low level of commitment from certain States to provide the necessary resource input to ensure the scheme is able to meet its stated objectives. While the merger will certainly improve overall accessibility of the services for ESI beneficiaries, in the absence of a binding agreement between States, PM-JAY and ESIC regarding the optimum resource input, beneficiaries may find it difficult to have effective access to services.

iii) ‘Crowding Out’ of PM-JAY beneficiaries & moral hazard

The ESI scheme has been designed as a comprehensive health coverage scheme with no financial ceiling regarding the quantum of services beneficiaries can utilize. Given the moral hazard arising from this, the authorities will also need to be mindful of exponential rise in service utilization among ESI beneficiaries (owing to demand and supply side factors). The consequence of such rise in utilization while potentially necessary, could result in a situation wherein the increased level of utilization could put a strain on scheme finances in the medium term as well as ‘crowd out’ PM-JAY beneficiaries from utilizing services.

iv) Quality of care

There have been several reports that cite the real and perceived low quality of care offered at ESI facilities (especially those that are State run). As a result of this many ESI beneficiaries have opted to avail services outside of the network in private facilities which may also be a reason for the low utilization seen under the scheme. While PM-JAY does provide the necessary safeguards regarding the quality of care to be offered at empanelled facilities, ensuring its stringent implementation will be central to increasing trust among ESI & PM-JAY beneficiates about quality of care available given the current perception.

The Process

To ensure seamless services to ESIC beneficiaries, NHA has made the necessary changes in the PM-JAY IT platform to enable seamless hospitalisation and claims payment. It has also sensitised the Empanelled Health Care Providers and different stakeholders to ensure smooth implementation. As under the current process, all the payments for the treatments will be done by the NHA to the hospitals against their claims. A dedicated call centre toll-free helpline 14588 has been set up by NHA to take up all queries and grievances from the public.

The government has approved PM-JAY beneficiaries to avail medical services in the underutilised Employees’ State Insurance Corporation, treating them as other beneficiaries, under The Other Beneficiaries and Members of their Families Medical Facilities Scheme, 2010.Inpatient department care will be as per the existing rates of PMJAY packaged rates.

An underutilised hospital for the purpose of this notification shall be the Employees’ State Insurance Corporation Hospital or Employees’ State Insurance Scheme Hospital where the bed occupancy is less than 60% during the last two financial years.

The ESIS has worked towards the integration of its Panchdeep Module with PMJAY for real-time eligibility check before availing services through ‘Ayushman Bharat’ in specified in the two pilot districts. This will now be expanded to the 113 districts under the next phase.

PMJAY and ESIS: The Schemes and their Coverage

The AB PM-JAY is run by the NHA under the Ministry of Health. The PMJAY covers the social and financial caste census (SECC) inhabitants and offers medical insurance coverage cowl of Rs 5 lakh for over 1,000 medical procedures. Since its inception in mid 2019, the PMJAY is now being implemented across 32 states and union territories. Close to 135 million e-cards have been issued to beneficiaries. Treatments worth INR 7,490 crore have been provided through 15 million hospital admissions. 24,215 hospitals have been empanelled across the country. 15 millions users have registered on the scheme’s website (mera.pmjay.gov.in)

The ESIC is a social security organization under the Ministry of Labour providing comprehensive social security benefits like medical care and a range of cash benefits in times of need such as employment injury, sickness, death etc. The ESI Act applies to premises/precincts where 10 or more persons are employed. The employees drawing wages up to Rs 21,000 a month are entitled to health insurance cover and other benefits, under the Act. The ESIS is run by the ESIC.

There are close to thirty million insured persons eligible for ESI benefits as in September 2020. There are 151 ESI hospitals and 1570 dispensaries across the country. Of these, 48 hospitals and 81 dispensaries are run by the ESIC while the remaining 103 hospitals and 1489 dispensaries are run by the states. Close to 1.4 million establishments are registered under the scheme.

In Conclusion

The convergence is among other similar efforts of the NHA to converge fragmented Central health schemes onto one platform. It is in consultation with multiple ministries including Social Justice and Empowerment; Labour and Employment and Home Affairs to bring the health schemes onto the NHA’s IT platform. Such moves will help synergize the different schemes and help utilize their funds to improve the infrastructure and facilities for beneficiaries across all these schemes.











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