With the sudden surge in COVID-19 cases following the second wave of the pandemic, many hospitals are now refusing to extend cashless medical insurance facility to patients.
Cashless insurance allows patients to walk out of the hospital without any payment as hospitals settle the claim with the insurance provider.
“The maximum the insurer can do is that they can blacklist the hospital and that is not a sufficient deterrent,” said Hari Radhakrishnan, Regional Director at Amicus Insurance Broking.
“This is because in case top hospitals are barred, then the insurer will only be left with second rung hospitals. So insurers have limited leverage over the hospitals in this scenario,” he said.
Insurers and hospitals have only a contractual relationship.
Union finance minister Nirmala Sitharaman on Thursday tweeted about reports are being received regarding some hospitals denying cashless insurance. “To deal with this situation, the finance minister spoke to Insurance Regulatory and Development Authority of India (IRDAI) chairman SC Khuntia to take immediate action.”
In March 2020, COVID-19 was included under the comprehensive health insurance plans. Cashless facility is available at networked or even temporary hospitals, she said.
Following this, insurance regulator, IRDAI also released a circular, asking insurers to have an arrangement with the hospitals for providing cashless facility. Such network hospitals are obligated to provide cashless service for all treatments including for Covid-19.
In the first wave of the pandemic last year, the industry body General Insurance Council, had released a list of standardised rates for Covid treatments. However, with increasing patient load, hospitals have said that patients cannot be put under capped rates.
In normal times, hospitals primarily tie-up with insurers and offer cashless facility to increase their occupancy and at that time, insurance companies are in an advantageous position over hospitals.
But as Radhakrishnan said, “Without the cashless facility too hospitals are getting several patients. So what is the incentive for the hospital to extend the cashless services?”
Delay in cashless process
Hospital officials say that the cashless process is cumbersome and takes longer (a couple of hours) for approval. This delay has further accentuated with many insurance officials also falling ill with Covid infection. With several patients waiting, it ends up holding the bed for the next incoming patient, they claimed.
A senior official from a public sector general insurance company said they have asked their third-party administrators to expedite the time for cashless approval to hasten the process.
In a recent earnings call, Bhargav Dasgupta, MD & CEO of ICICI Lombard said, the company hoped that hospitals won’t deny cashless facility and force customers to opt for reimbursement as they don’t want their customers to suffer.
(Deepa Nair is a Mumbai-based journalist specialising in finance and international affairs.)