More than a year after the Coronavirus outbreak in India, insurers are looking to redraft the service level agreements (SLAs) with hospitals. This is amidst the rise in cashless policy rejections by medical institutions.
Sources told Moneycontrol that these tweaks are on the back of rising concerns about hospitals rejecting requests to settle claims on a cashless basis despite being part of the network.
The move follows the finance ministry intervention on April 22, insisting that COVID-19 claims have to settled on priority.
Now, errant hospitals which refuse to accept cashless claim requests from patients' kin could be removed from the insurers' network. Multiple complaints and removal by insurers can result in hospitals being blacklisted.
“Despite having agreements, a few hospitals are refusing to accept cashless claims. This is forcing insurers to take a tough stance. In the meantime, reports of inflated billing continue,” said the chief executive of a health insurance firm.
Insurers have between 50-150 network hospitals in metro cities and 20-30 in smaller towns for cashless treatment. As part of the SLA tweaks, hospitals will also be mandated to accept that no cashless customer can be turned away if beds are available.
What are SLAs?
Insurers sign SLAs with hospitals that are typically renewed annually. The SLAs provide information on the types of treatment that will be offered, pre-agreed rates and also cashless insurance. Cashless claim means that the customer who is hospitalised is not required to pay any cash, and the bills are directly settled between the hospital and the insurer.
Reimbursement claims, on the other hand, are those where the insured pays the medical bills and get the amount reimbursed from the insurer after discharge.
“The finance ministry has also come down heavily on claim rejections. However, our hands are tied because hospitals are not accepting cashless facilities," said the claims head at a bank-led general insurer.
He added that reimbursement claims take longer (30-40 days) to be settled since it involves verification of bills by a third-party administrator and then by the claims department of the insurer. Cashless claims, on the other hand, are instant.
As on April 20, 900,000 COVID-19 health claims worth Rs 8,642 crore were settled by insurance companies. General insurers have received health insurance claims pertaining to Coronavirus treatment worth close to Rs 15,000 crore, according to the General Insurance Council data.
Moneycontrol had reported earlier that finance minister Nirmala Sitharaman has asked the Insurance Regulatory and Development Authority of India (IRDAI) to direct companies to prioritise COVID-19 claims.
Sitharaman had also said that reports about some hospitals denying cashless insurance are being received.
Following this, the IRDAI sent a circular to insurance companies asking them to expedite COVID-19 claims settlement.
"While reviewing cashless requests, insurers are also advised to ensure that policyholders are charged as per the rates agreed to by network providers wherever applicable. Insurers are also advised to ensure that hospitals do not levy additional charges for the same treatment other than those rates agreed with the insurers," the circular said.
Moneycontrol had earlier reported how there is a constant tussle between hospitals and insurers on COVID-19 hospitalisation rates.
Insurers rue that hospitals are not following the standard rate cards
issued in June 2020 by the General Insurance Council. Hospitals, on the other hand, have said that all patients cannot be put under capped rates.