Medical insurers curb cashless facility

 NEW DELHI: If you have a mediclaim policy that entitles you to cashless
facilities, here’s some bad news. You will no longer be able to get
these facilities at high-end hospitals like Apollo, Fortis, Ganga Ram,
Max or Medicity in Delhi, the national capital region (NCR) and the
metros of Mumbai, Bangalore and Chennai.

All insurance companies providing mediclaim facilities, a cashless
health insurance, have stopped direct payment of treatment charges to
150-odd high-end hospitals in Delhi and NCR alone from July 1. If you
now go to any of these hospitals, you will have to pay from your pocket
despite having a valid mediclaim policy with all premiums paid. You will
then have to reclaim the amount from the insurer with no guarantee that
the entire amount would be reimbursed.

At least 18 insurance companies, including the four public sector
entities, have taken off more than 150 hospitals in Delhi and NCR from
their designated list for the cashless facility. This facility will now
be available at only 100-odd hospitals, none of them from the big
chains. There’s been a similar axing of hospitals from the list in other

What’s forced these insurers to take this step is the fact that they
have been bleeding badly. They are making an estimated loss of Rs 1,500
crore annually on a yearly premium collection of Rs 6,000 crore on
mediclaim policies across the country, according to Pawan Bhalla, the
CEO of Raksha TPA, the third party administrator (TPA) which is a
facilitator between the insured and the insurer.

These 18 insurance companies had so far been providing cashless services
at over 3,000 hospitals pan-India. But a recent study carried out by the
TPAs found that only 350 of them or roughly 11% were consuming more than
80% of the total claims.

It was also found that customers were overcharged for each
hospitalization, irrespective of the treatment, and were left with very
little funds for their next treatment. “This is intended to discipline
the hospitals who are overcharging a customer,” said Bhalla.

Segar Sampath of the New India Assurance Co Ltd said, “TPAs have been
asked to convey the fresh list of hospitals to individual policyholders
as also the new packages available.”

These insurers have worked out treatment packages and depending on the
hospital’s infrastructure, the lower or higher rate will be applicable.

For instance, hospitals that are part of the big chains charged Rs
58,000 on average for a gall bladder operation. Now, according to the
new package deal, a hospital would be offered anywhere between Rs 30,000
and Rs 48,000 for the same. Similarly, for a cataract operation, the
average payout was Rs 35,000. The new deal provides for a maximum of Rs
24,000, while it would be Rs 14,000 if the surgery is done at a smaller

The insurers, said Bhalla, have been negotiating with the big chains for
the last six months in an attempt to persuade them to accept the
packages. “So far, however, none of them has responded positively,
forcing the insurers to take this drastic step,” said Bhalla.

The insurers have identified the four metros of Delhi, Mumbai, Bangalore
and Chennai to start with the new package deals. The scheme would then
be rolled out across the country. These four metros account for almost
50% of the Rs 6,000 crore annual mediclaim premium collected by the 18
insurers. Overall, the premium collection on health insurance is
estimated to be upwards of Rs 9,000 crore.

Courtesy: Pradeep Thakur, TNN

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