Big hospitals do not share IRDA' optimism on cashless solution

"I understand that the industry and hospitals are in discussion and I am confident that they will be able to arrive at a solution," Insurance Regulatory and Development Authority Chairman J Hari Narayan told reporters on the sidelines of a CII Health Insurance Summit here.

The cashless medical facility was suspended by four PSU insurers -- New India Assurance, United India Insurance, National Insurance and Oriental Insurance-- from July 1 after they alleged over-billing by certain private hospitals. Some sort of agreement was reached between the insurers and a section of hospitals, which joined the Preferred Provider Network (PPN)- an arrangement for cashless medical treatment to the insured patients.

About 450 hospitals have so far accepted the fresh rates given by the PSU insurers and are on the network. However, the big private hospitals, including Fortis, Apollo and Medanta have not joined the PPN with the rates on offer.

"The differences (between hospitals and insurers) continue," Max India Chairman Analjit Singh said, adding that the real issue is cost. "If you want better treatment and facilities, you have to pay more," he said. Voicing the same concern, Apollo Hospitals Group Chairman Pratap C Reddy said the impasse is yet to be resolved. "The current rate structure can not be sustained," he said.

While the impasse over the cashless hospital treatment continues causing uncertainty among the policy-holders, both IRDA and the private hospitals are asking people to take up insurance penetration. There are 10 million people covered under the insurance policies,according to IRDA.

Planning Commission Deputy Chairman Montek Singh Ahluwalia said that the country should increase its spendings on health sector and also the insurance cover should be extended to 60 million to match the developed countries. The penetration level in general insurance companies is quite low. We need to take it to 600 million, from the 10 million currently, he said.