Cashless plan: Insurers for their ‘own’ rates

State-run insurers on Thursday asserted that the facility would be extended only to those hospitals that agree to their rates for medical expenses.

New Delhi: Locked in a battle with big healthcare firms over censoring cashless health insurance claims, state-run insurers on Thursday asserted that the facility would be extended only to those hospitals that agree to their rates for medical expenses.

"The purpose of working out such package rates and stabilising the hospitalisation costs, will benefit the insured in many ways," the four state-run general insurance companies -- National Insurance Co, New India Assurance Co, Oriental Insurance Co and United India Insurance Co -- said in a joint public notice.

Presumably hurt on their balance sheets by the allegedly inflated bills for medical costs of people covered by cashless mediclaim facilities, these insurers have pruned the list of hospitals in four large cities for providing this facility with effect from this month.

The selected list of hospitals in Delhi and National Capital Region, Mumbai, Chennai and Bangalore, does not include big chains like Fortis and Max Healthcare and was prepared on the basis of those accepting rate packages prepared by the insurance firms for medical procedures and hospitalisation costs.

While the insurers` move has been vehemently opposed by large hospitals, the general public has also been caused inconvenience as settlement claims for many of them were refused at the hospitals not on the preferred list for such a facility.

A conciliatory meeting was arranged between the insurers and the hospitals in Mumbai on July 13, after which the insurance firms agreed to work upon expanding the list of approved hospitals for cashless facility.

In today`s statement, the four public sector insurers that together command nearly 65-70 per cent health insurance market share, however, made it clear that only those hospitals would be included in the list that adhere to its conditions on medical costs.

"We along with some TPAs (Third Party Administrators), worked out package rates for some of the procedures/ hospitalisation expenses, which are commonly claimed under our health insurance policies," the statement said.

Having offered these rate packages to various hospitals over a period of several months, those agreeing to the offer were included in a "Preferred Provider Network", or a network of hospitals where cashless mediclaim facilities would be available, the insurers said.

For treatment at non-PPN hospitals, the policy holders would need to seek reimbursement of expenses later.

Under cashless facility, the policyholders do not need to first pay the hospitals and later claim the expenses. Instead the insured sum gets deducted from the medical bills in the very first place.

With effect from July 1, the PPN model was made operational in Mumbai (74 hospitals), Delhi NCR (131 hospitals), Chennai (65) and Bangalore (58).

The insurers said that "many more hospitals have evinced interest in joining our PPN and we would be including them too." The insurers have also agreed to work with corporate hospitals and other stakeholders to devise a structure for expanding the PPN.

The four state-run companies also made it clear that their move to restrict cashless facility to approved hospitals would bring down the costs for the insured.

"Lower cost of every hospitalisation will leave a larger balance in the sum insured in the policy for future hospitalisation within the policy period."

"Lower cost will also reduce loading on policy premium at the time of renewal," they said, while adding that their step was "in the interest of all health insurance policy holders."


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