No more cashless insurance cover

Policy holders must pay first and then ask for reimbursement

All general insurance companies who offer health insurance, including four from the public sector, have withdrawn the cashless facility to their policy holders in certain hospitals in select  cities from July 1.

Under the new system, policy holders will have to pay from their own pocket first for the treatment and subsequently claim the reimbursement.

To start with, the insurance firms have withdrawn the facility in select private hospitals in four metropolises-Delhi (National Capital Region), Mumbai, Bangalore and Chennai, a senior executive working with National Insurance Company told Deccan Herald on condition of anonymity.

“We were constrained to take this decision as it was realised that health insurance firms have been shelling out more towards mediclaim than the premium they are earning,” the official said.

Agreed CEO and MD of Bharti AXA General Insurance Company Amarnath Ananthanarayanan: “We had tied up with nearly 4,000 hospitals in the country for the cashless treatment but from July 1 we have de-paneled 200 hospitals.”
“We were forced to take this step because these hospitals were overcharging patients, making them undergo unnecessary tests and medical treatments mainly to inflate the hospital bills,” he said.

Complicated issue
It all started about three weeks ago when major health insurance companies told hospitals that due to heavy claims from the mediclaim policy holders, the business was bleeding and they needed to cut cost. Insurance companies, therefore, urged hospitals to cut down their billing by 20 to 40 per cent.

Insurance companies, through their TPAs (Third Party Administrators, who process the insurance claims from hospitals), insisted hospitals to agree to new rates. Since most hospitals did not agree, the insurance companies removed about 200 smaller hospitals from the list of approved hospitals.

Explained Chief Executive Officer of Bangalore-based Fortis Hospitals Vishal Bali, “As of now, only smaller hospitals have been barred and we are not one of them.” Bali is of the view that it is wrong on the part of the insurance companies to insist on a blanket 30 to 40 per cent reduction in the cost of treatment. “You cannot measure the cost of all hospitals and nursing homes by the same yardstick. Pricing must reflect the quality of treatment and facilities provided. In super speciality hospitals like ours we cannot compromise on the quality of treatment and ruin our reputation,” he added.
Bali and representatives of other big hospitals will soon start a discussion with the insurance companies to completely redesign the health insurance system so that all constituents - mediclaim holders, hospitals and insurance companies benefit in the long run.

Insurance companies too are keen to resolve the stalemate as they do not make money from health insurance. While they agree that initially policy holders will face some hardship due to removal of some hospitals from cashless treatment, in the long run all will benefit.
DH News Service

*Insurance firms have withdrawn facilities in selected hospitals in the four metros, including Bangalore
*The move comes after the firms ‘realised’ that they were shelling out more towards mediclaim
*Insurance firms wanted hospitals to lower billing rates
*Hospitals refused, saying costs differ on quality of treatment
*Hospitals and insurance companies will now hold
discussions to redesign health insurance system

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