Hospital refused to admit cashless claims? Situation to change

Mothers hold their newly-born babies as they rest inside a maternity hospital during "World Population Day" in Kolkata July 11, 2012. The world's population edged to 7 billion people in 2011, up from 2.5 billion since 1950. This year's World Population Day focuses on the theme of "Universal Access to Reproductive Health Services", according to the United Nations. REUTERS/Rupak De Chowdhuri (INDIA - Tags: HEALTH ANNIVERSARY TPX IMAGES OF THE DAY) - GM1E87B1KMJ01

Two major Mumbai-based superspecialty hospitals are in talks with insurance companies to allow cashless facilities to all patients who have a health policy. Although claim settlement ratios have been high among standalone health insurers and general insurers, several hospitals across the country only accept reimburse claims due to fear of non-payment of dues.

Not just in Mumbai, more than 60 hospitals across the country have been identified by insurance companies for cashless claims. Talks are on to assuage fears of the medical facilities, sources said and added that the hospitals could take action on this in the next 3-6 months.

Several hospitals in Tamil Nadu, which is considered the healthcare services capital in the country, are believed to have refused to admit patients on cashless health insurance basis. Hence, insurance companies have been in talks with medical institutions over the past 3-4 months to resolve all issues on acceptance of cashless claims.

Under a cashless medical policy, just before getting admitted, a patient’s family needs to disclose details of the policy and the hospital can directly collect all the charges from the insurance company. In the case of a reimbursement policy, the policyholder needs to pay the hospital directly and later gets the claim settled from the insurance company.

However, in the case of medical emergency, having a cashless product is much easier on the kin of the policyholder. Financial constraints often lead families to looking for loans to meet hospitalisation expenses.

Chief Operating Officer of Mumbai-based Nanavati Super Specialty Hospital, Rajendra Patankar, said that while things are improving now, they face issues like delay in settlement of bills from certain insurance companies. Nanavati Hospital deals with 40-50 third party administrators (TPAs) that represent 10-15 insurance companies.

“This led to constant follow-ups and wastage of time, adding to that the prices offered on procedural package were too low and nonviable for us to provide services,” he said.

On one hand, while policyholders have been wary of reimbursement claims fearing insurers would only pay a part of their claims, hospitals have a similar fear in case of cashless claims.

Patankar said that the delays used to be on average 90 days, now they have come down to 30-45 days. Ideally, he said that the settlement should happen within 15 days.

Some hospitals on the other hand accept cashless policies, but insist the insured person's kin deposit at least Rs 1 lakh to 2 lakh until the claim is received from the insurer.

“We had some rounds of discussions with the hospitals and are hoping that they start accepting cashless policies of patients,” said G Srinivasan, CMD, New India Assurance.

An issue of concern for hospitals, as raised by Patankar, is that insurers settle bills on a lump-sum basis and do not ask hospitals for a break-up of how much they paid for each individual bill.

"The biggest problem is that there is no authority regulating the hospital which is why some practices haven't been able to change. We are in active talks to get them to accept cashless," explained the head of underwriting at a large private sector general insurance company.

During the discussions, the point of hospitals charging differential rates for those with insurance has also been raised.