Cashless Mediclaim row debated in Parliament.

NEW DELHI: “More and more hospitals will join the network (Preferred Provider Network) in coming days," said minister of state for finance Namo Narayan Meena while replying to a calling attention on the issue, raised by BJP member S S Ahluwalia, in the Rajya Sabha.

He said public sector insurance companies had to resort to rationalization of rates for cashless facilities as they suffered a loss of Rs 2,000 crore because of overcharging by hospitals in Mumbai, Delhi, Chennai and Bangalore. If the hospitals were allowed to overcharge, it could result in "serious consequences" leading to insolvency of the insurance companies, he added.

Citing an example, he said while the private hospitals were billing Rs 1.35 lakh from an insured for Caesarian operation, the rate was Rs 55,000 for uninsured and the CGHS rate was only Rs 15,000.

Raising the issue, Ahluwalia earlier said there was no standardization of rates. "The government was leaving the people at the mercy of hospitals. Patients should not suffer because of overcharging by hospitals and some cases of manipulation," he said.

Clarifying the issue during his reply, Meena said: "It may be noted that the Standard Health Insurance Policy does not provide for any assurance of cashless facility to the insured. However, in cases where a mention of cashless facility has been made it has been mentioned that the claims in respect of cashless facility will be through the agreed list of Network Hospitals/Nursing Homes/Day Care Centers and is subject to pre-admission authorization".

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Experts from Medimanage.com give their opinion:

Sudhir Sarnobat:

Sudhir Sarnobat from Medimanage.com

The minister has raised couple of important points which are at the heart of this issue.

It’s important to note that the cashless is not a service in itself but a way to ensure claim settlement. This is subject to “pre-authorisation” by TPA & hence, should not be taken for granted as right of insured. Also the insurer has right to add/remove hospitals from the network & hence, the network would always be dynamic. However, the insurer have been clearly declaring that they pay 5.5% to TPA for their services & the same is loaded on the basic premium. This has led to interpretation that cashless is right of insured as he/she has paid for that service.

The hon. Minister has brought forward the urgency & important of this issue by communicating about the losses made by insurers under Mediclaim portfolio & if the same are not reined in on time, insurance companies may become insolvent (will not be in position to pay claims for policies sold). This is very important for long term sustainability of insurers & for the larger interests of the policy holders who have paid the premiums for many years without claims & would have claims now. If the insurance company that they have trusted for years can’t pay the claim, they would be left high & dry. This would also be detrimental for policy-holders confidence in a developing insurance market like India where the insurance penetration is high & breach of trust can bring down the sales numbers which are direly needed for better spread of the risk.