Simplification of Claims for Indemnity Insurance and Discussions on Insurance Business Act Amendments
Need to Prevent Side Effects Such as Personal Information Leakage and Liability Issues
Amendment of Medical Service Act to Allow Third-Party Access to Medical Records
[Asia Economy Reporter Oh Hyung-gil] A bill to amend the Insurance Business Act to make it easier to claim indemnity health insurance has been proposed.
The simplification of claims, which has been stalled for over a decade, now has a greater chance of passing. However, there is attention-grabbing opinion that in order to simplify claims, not only the Insurance Business Act but also the Medical Service Act and others need to be amended together.
According to the insurance industry on the 12th, both ruling and opposition parties have proposed bills to simplify indemnity insurance claims. Jeon Jae-su, a member of the Democratic Party of Korea, proposed the "Partial Amendment to the Insurance Business Act," focusing on simplifying indemnity insurance claims through digitization. Additionally, Yoon Chang-hyun of the People Power Party submitted a bill with the same intent on the 31st of last month, increasing the likelihood of its passage.
According to the recent report by the National Assembly Legislative Research Office titled "Current Status and Challenges of the Indemnity Health Insurance Claim Simplification System," to minimize potential side effects from introducing claim simplification, considerations during the legislative process should include exceptional recognition of third-party access to medical records, risks of personal information leakage, the party responsible for various costs, and regulations on the scope of work of the Health Insurance Review and Assessment Service (HIRA).
The currently proposed amendment to the Insurance Business Act related to indemnity insurance claim simplification should establish a legal basis to enable smooth transmission of supporting documents such as medical records between institutions.
Furthermore, the core content is to connect medical institutions, HIRA, and insurance intermediary institutions, simplifying the insurance claim system through an integrated electronic network.
Medical Community Opposes Over Concerns of Medical Information Leakage
However, the medical community has expressed difficulty in accepting the provision that medical institutions directly submit supporting documents to insurance companies upon the request of insurance consumers to simplify the claim procedure.
They argue that indemnity insurance is a contract formed based on a private legal relationship between the insurer and the insured, and it is unfair to impose the responsibility of record transmission on medical institutions, which are not parties to the contract.
Additionally, there is a risk of patient personal information leakage during the electronic transmission of medical records, and if disputes arise regarding responsibility among medical institutions, entrusted institutions, and insurance companies, consumers are likely to hold the medical institutions responsible as the transmitting party, which places a burden on medical institutions.
Therefore, the report argues that proactive discussions are necessary on whether the exceptional third-party access to medical records, currently recognized only for public systems under the Medical Service Act, should also be applied to indemnity health insurance.
Regarding the risk of personal information leakage, it is necessary to establish standards for standard documents that provide only the information necessary for insurance payment, create a legal basis for encrypting and transmitting such information, and include provisions limiting the use of personal information transmitted for insurance claims solely to the purpose of indemnity insurance payment.
The report suggests that since simplifying indemnity insurance claims is expected to reduce administrative costs by alleviating the workload of insurance companies, it is reasonable to establish related regulations requiring insurance companies to bear the costs of system construction and operation, as well as document dispatch and receipt.
Furthermore, it adds that if the electronic transmission of necessary documents for insurance claims and the establishment and operation of the electronic system are entrusted to HIRA, amendments to the National Health Insurance Act are also necessary. Under the National Health Insurance Act, HIRA’s main duties are defined as "review and appropriateness evaluation of medical benefits," and entrusted tasks are limited to "review of benefit costs or evaluation of medical appropriateness."
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