Indian hospitals push back on cashless insurance

Indian hospitals push back on cashless insurance | Insurance Business Asia

Life & Health

Concerns revealed on the back of rising healthcare costs in the country

Life & Health

By
Roxanne Libatique

Insured patients in Pune, India, are encountering obstacles when trying to use the “cashless everywhere” insurance facility, introduced by the General Insurance Council (GIC).

According to Hindustan Times’ report, local hospitals have been claiming that they are reluctant to offer the service, citing low reimbursement rates and discrepancies between approved amounts and actual payouts from insurance providers.

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GIC cashless everywhere initiative

The GIC’s cashless everywhere initiative was launched in January 2023, with further guidance issued by the Insurance Regulatory and Development Authority of India (IRDAI) in June. This guidance required insurers to expand their coverage offerings to include individuals with pre-existing conditions and chronic diseases.

Monetary issues in GIC cashless everywhere initiative

Dr Sanjay Patil, chairman of the HBI Pune chapter, said the rates offered need adjustment, and the deductions being made are causing issues for patients and healthcare providers.

“Due to such type of deductions and low payments, the hospitals cannot compromise on the quality and safety of patients,” he said, as reported by Hindustan Times.

He added that hospitals cannot compromise on patient care due to financial limitations, yet insurance contracts prevent them from asking patients for any additional payment.

A patient’s relative, who requested anonymity, shared a case where insurance reimbursement fell significantly short. The relative claimed that their father underwent surgery with an estimated cost of ₹1.25 lakh, of which ₹1 lakh was approved by the insurer. However, in the end, the hospital received only ₹40,000 from the insurance company, leaving the family to cover the difference.

Insurance-related issues in hospital empanelment

Dr Aniket Joshi of IMA Pune highlighted challenges in hospital empanelment, noting that despite holding a nursing home registration, hospitals must undergo additional approval processes with insurers.

“Even after having nursing home registration the hospitals have to apply separately to insurance companies for empanelment. The empanelment is done on the wimps and fancies of the insurance companies,” he said.

He advised the government to ask insurance companies to give blanket approval to hospitals registered under the Nursing Home Act to make cashless everywhere successful. Also, the co-payment option should be made available.

Many hospitals are now requesting patients to pay upfront and later claim reimbursement from their insurance providers, which defeats the purpose of a cashless system.

Another issue raised by the hospitals is the absence of grievance mechanisms available to them under the scheme, a protection that patients currently have.

The report showed an average increase of 11.35% in claim sizes, attributed to medical inflation, which surged to 14% in 2023. The financial impact is especially significant in a country where 62% of healthcare costs are paid out-of-pocket, and just 23% of urban households are covered by health insurance.

The report also emphasised varying health trends across regions. Kidney-related claims were highest in Delhi NCR, while heart disease claims were most prevalent in Mumbai, Kolkata, and Pune. Maternity claims showed that 69% were linked to C-sections, with differences between public and private hospitals.

In response to the rising cost of healthcare, ACKO advises individuals to consider supplementary personal health insurance policies in addition to any corporate plans they may have. The report stressed the importance of understanding policy details, such as waiting periods, room rent limits, and deductibles, as these factors can significantly affect coverage.