Cashless is a mechanism in health insurance, not the product in itself.

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Cashless facility heal thyself

Unfortunately, despite the growth and their leading market share, state-owned insurers have not been able to give focused attention to health insurance through the creation of a health insurance division. The grapevine has it that the current imbroglio over cashless is partly because of differences between two senior executives entrusted with health insurance in a leading public sector firm. Instead of arriving at a middle of the road solution, such as asking for co-pay or segmenting their policies, PSU insurers have chosen to renege on their contracts with policyholders and withdraw cashless facilities with most of the tertiary-care hospitals. The result of this decision has been a frenzied round of finger pointing which makes it almost impossible to state the problem.

Insurers have alleged that hospitals are padding up their bills for policyholders. This is in sharp contrast to the practice in markets, such as the US, where insurers are able to bargain for better discounts. They have therefore decided to flex their muscles and have stayed away from the negotiating table, despite feelers from hospitals.

Third-party administrators (TPAs) have all along been having fights with hospitals over the need for tests and billings. This has resulted in TPAs being blacklisted from time to time. Hospitals, on their part, accuse TPAs of interference in medical decisions, needless harassment caused by their verification processes and delay in receiving reimbursement. “The days of naadi shastra are over. Today, we can decide on treatment only after conducting tests. TPAs cannot apply the wisdom of hindsight and tell us that a particular test was unnecessary,” says a medical director of a leading hospital in South Mumbai, defending the medical practices of using the process of elimination through various tests.

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Experts from Medimanage.com give their opinion:

Sudhir Sarnobat:

Sudhir Sarnobat from Medimanage.com

Cashless hospitalisation is not a product in itself but an extended service for a core product of indemnity against hospitalisation expenses. However, this has been an attractive product feature & has helped in popularisation of Mediclaim in Urban India. However, this has been abused by some hospitals most of the time or most of the hospitals some of the times. Though the insurers are trying to bring in underwriting discipline to improve claims performance, they also are trying to make the consumption efficient & hence, this upheaval that we are witnessing in the market.

Though the hospitals (and doctors) may not like interference in their treatment, some amount of questioning & control will happen from the Insurers & TPAs. Doctors, being not habituated to such interference (In India, we treat them like God but abroad, they are always questioned & challenged) they feel threatened but with changing time, need to be open & educative.

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