Cashless mediclaim facility set to resume

The private sector hospitals and PSU insurers are likely to arrive at an interim settlement on restoration of cashless treatment facility at major hospitals in the country from Friday.

The major corporate hospitals -- Apollo Healthcare, Max, Medicity and Fortis -- have given their package rates for treatment under mediclaim policies to the Third Party Administrators, which are the facilitators between the insured and the insurer.

"By tomorrow, TPAs will revert to the hospitals on the package rates. Cashless facility in these hospitals would be restored on an interim basis by Friday," Max Healthcare Institute MD Pervez Ahmed told PTI.

Although the cashless treatment facility will be restored from tomorrow on interim basis, it would take some time for the hospitals and four PSU insurance companies to arrive at final settlement on the vexed issue.

"Final rate structure would be decided in another 30-40 days. Under the structure that is being worked out, hospitals would be categorised on the basis of super specialty medical centres and premiums would vary accordingly," he said.

Currently, there are 449 hospitals across the country under the cashless network, but corporate hospitals were removed by the PSU insurers from their preferred provider network (PPN) from July 1.      

Four insurance companies -- New India Assurance, United India Insurance, National Insurance and Oriental Insurance -- had stopped the cashless service to these hospitals on charges of over-billing. Ahmed said the package rates have been segmented on the basis of categorised hospitals.

"There will be three categories -- A, B, C-- for classification of hospitals and each segment could also have a sub-category," he said.

The categorisation would happen on the basis on infrastructure facilities available in these hospitals. Industry players said such agreement would eventually lead to insured paying out higher premiums for treatment in super specialty medical centres.

Such differential pricing would help the health insurance industry, which is currently a loss-making proposition.

Currently, many health insurer give more in claims than they collect from premiums. In fact, the claim ratio, which measures this trend, is about 140 per cent for the industry.

There are about eight crore mediclaim policy holders in the country. The public sector insurance companies had to resort to rationalisation of rates for cashless facilities as they suffered a loss of Rs 2,000 crore (Rs 20 billion) because of overcharging by hospitals in Mumbai, Delhi, Chennai and Bangalore.