The controversy began three weeks ago when a few health insurance companies decided not to honour bills submitted by hospitals for settling claims of their patients. The reason: Hospitals allegedly overcharged for their services and presented inflated bills to insurance firms who pick the tab on behalf of their clients. For instance, many private hospitals charge more than Rs 70,000 for a Caesarean delivery. Insurance companies say the procedure shouldn’t cost more than Rs 45,000.

The Insurance Regulatory and Development Authority (IRDA) is yet to take a stand on the issue. IRDA chairman J.Hari Narayan did not respond to HT’s phone calls or text messages. A source in the IRDA, who did not wish to be identified, said the regulator was collecting all background information on the reasons that led to the impasse. The IRDA could ask insurance companies to adopt a grading system for hospitals based on parameters such as super-speciality facilities, technology, location and critical care infrastructure. If adopted, this would mean hospitals that score high on these parameters would be entitled to furnish fatter bills, a source said.

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Experts from Medimanage.com give their opinion:

Sudhir Sarnobat:

The grading system of the hospital is welcome change but the implementation should be based on the class of treatment allowed at hospital, based on the hospital’s infrastructure.

This would help in up gradation of the infrastructure of small & medium hospitals (20-100 Beds) & patients undergoing procedures at such hospitals would benefit while the insurer’s cost would come down as the patients would not be visiting the Tertiary care hospitals for Primary & Secondary care.

The overall health insurance claims costs would come down in short term & improve quality, provided the categorisation & selection of hospitals is undertaken in transparent & efficient manner.

Purandar Bhavani:

It is not right on part of the insurance company to deduct direct payments to hospitals committed by its representative, the TPA. The TPAs were instituted as a gatekeeper to help the insurer provide value to the insurance product while ensuring that the spirit of insurance remains intact. Insurance is about paying reasonable expenses in the event of the loss. As a gatekeeper, it is the duty of the TPA to ascertain in its wisdom what is a reasonable claim and advice the hospital and the insured accordingly.

But once a sanction is given to the hospital, it becomes binding on the TPA / Insurer to pay the claim. The insurer in his right can take up the issue with the TPA and unless proved otherwise recover the excess from the TPA.

Unless this is done it is the insured that will be at loss for no fault. I have come across cases where the hospital has severely embarrassed the insured by going to his home and office to recover the balance money.