Health insurance claim reform: Cashless treatment at any hospital may be a reality next year; how it will help

Often health insurance policyholders have to go for an urgent treatment in a hospital which is outside the network hospitals for cashless facility offered by their insurers. In such cases they have to pay the entire treatment amount and then go for cumbersome claim process of reimbursement. To reduce the hassle faced by health insurance policyholders, the Insurance Regulatory and Development Authority of India (IRDAI) is likely to introduce a 100% cashless hospital network that will include both empanelled and non-empanelled hospitals, two major industry players told ET Wealth Online. So, health insurance policyholders can soon avail of cashless treatment in hospitals, even if they are not empanelled with their insurance companies. What it means for you and how it is going to help you? Read here to find out.

Cashless hospitalisation under health insurance: What is the existing rule?

Till now, a health insurance policyholder can avail of cashless facility only at network hospitals with whom the insurance company has tied up. The insurance company settles medical expenses directly with the network hospital, thus, allowing policyholders the advantage of receiving medical treatment without worrying about sudden outflow of funds due to medical expenses.

Each insurance company has an independent network of medical service providers that they have a tie-up with. At present, cashless settlement is available only in 49% of the hospitals in India. "While this network includes all the large tertiary care hospitals, the spread of the network of hospitals was dependent on the density of customers in a particular geography. Therefore, invariably some customers would take treatment at hospitals that their insurer does not have a tie-up with," an official from one of the prominent insurers told ET Wealth Online, speaking on condition of anonymity

100% cashless network: Cashless facility in non-empanelled hospitals — what is going to change?

The insurance regulator, along with the General Insurance Council (GIC) has proposed to introduce a 100% cashless network. "In the process of doing so, the regulator may consider cashless treatments from non-empanelled hospitals as well," says Parthanil Ghosh, President – of Retail Business, HDFC ERGO General Insurance Company Limited.

The proposed initiative will merge the network of all insurers thereby creating one master network which can be utilised by all participating insurers across the industry, said the other health insurer.

Cashless hospitalisation at non-empanelled hospitals: How will it work?

How can you get a cashless facility at a non-empanelled hospital? For treatment in a non-empanelled hospital, the health insurance policyholder will have to intimate a claim prior to hospitalisation (around two days in advance), so that the insurance company can start coordinating with the hospitals for cashless treatment, the health insurers explained. The charges will be based on the rates of existing empanelled insurers. "Since a significant part of reimbursement claims are due to insurance company being unaware of the admission this will be a key factor for successful implementation," mentioned the health insurer.

Adding to it, Ghosh says "Under a consolidated cashless network concept, the current cashless network across different insurers can be accessed by any other insurance company to offer cashless claims to its customers. Further, the industry would also collaborate to ensure that all hospitals are available as part of the cashless network to ensure that the out-of-pocket expenses are minimised considerably and the quantum of frauds comes down."

Health insurers told ET Wealth Online that this facility is going to be implemented soon. "It is expected that modalities will be worked out from early next calendar year," says Ghosh.

"The initiative is in the final stages of implementation and should be live very soon," said the other health insurer ET Wealth Online spoke to.

Medical treatment to become more affordable

How is it going to help the customers? At present, if a customer goes to a non-empanelled hospital for her treatment, she needs to pay first and get it reimbursed from her insurance later. In such cases, the onus of collecting documents required for an insurance claim rests solely with the customer. A significant portion of claims filed for reimbursement go through multiple query cycles due to want of critical documents for which a customer would have to coordinate with the hospital multiple times.

Cashless treatment at non-empanelled hospitals could be a win-win situation for everybody, says Ghosh. "For customers, this initiative will provide greater convenience to them as they do not have to worry about the enlistment of hospitals as per their insurance policy, especially during the time, when they are already undergoing anxiety of hospitalisation. The hospitals also can stay rest assured on the settlement of bills, as the stipulated Turn Around Time for the insurers to settle 100% cashless bills is 30 days," he adds.

This move is likely to help in planned hospitalisations for several treatments. To know how it will be implemented for unplanned emergency hospitalisations, we have to wait for the final announcements by the insurance regulator.

"It is also a welcome move for the insurers as all genuine hospitals, that follow the right process and protocols will be empanelled as a part of this process, and the possibility of fraud, which is otherwise seen mostly during reimbursement claims, will come down. Overall, it is expected that health insurance will continue to be affordable for all," Ghosh mentions.