Mint 13/7/10

Have a health insurance policy from a state-owned insurer? The next time you make a claim, remember to carry some cash even if you have a cashless policy, especially if you are visiting a big private sector hospital.

Four state-run insurers have withdrawn cashless facility from many private sector hospitals including big names such as Apollo Hospitals, Max Hospitals, Batra Hospitals and Escorts. It was first reported by The Times of India on Sunday. The reason, according to the insurance companies, is the twin rate card that some hospitals run. They charge patients carrying an insurance cover higher for the same procedure than others who may not have an insurance policy. Says N.K. Singh, general manager, Oriental Insurance Co. Ltd: “Currently, two rates are being quoted by the hospitals. For patients having insurance, a slightly escalated rate is charged. To sustain these escalated claims, we would have to increase our premiums. Also, this is not good for policyholders as he also loses out by way of a decreased sum insured for that year.”

With claims as high as 130-140% of premiums, the companies have been working on a solution for some time. Now, Oriental Insurance, New India Assurance Co. Ltd, National Insurance Co. Ltd and United India Insurance Co. Ltd have formed a preferred provider network (PPN) of hospitals that have agreed to charge within a certain price band. The PPN hospitals will continue to enjoy the cashless facility, but those outside, and this is where you need to begin worrying, will not. The big hospitals mentioned earlier are out of PPN for now as negotiations are still going on and that is where most of the urban mass affluent go with their ills and ailments. You will have to resort to the earlier practice of paying up at the hospital and then claiming reimbursement.

Considering that 60% of the health insurance business is still handled by state-run insurers, there is a huge chance that you will be affected by this change in rules. In order to bring some standardization in the way hospitals charge, state-run insurers have entered into pricing agreements with empanelled hospitals. Adds Singh: “We have spoken to our empanelled hospitals and have agreed on a fixed rate for 42 major medical procedures. The rates have been agreed upon depending on the hospital category, which is decided by the location, number of beds and facilities offered. All the hospitals that have agreed to this rate come under PPN and we will continue to offer cashless facility to them.”

Since the big names are conspicuous by their absence in this list of PPN and they account for 80% of the claims, a crisis is brewing in the industry and you are going to pay the price.

For those of you who prefer to go to one of these hospitals but have a health policy with a state-run insurer, the claim procedure may not be as smooth as it used to be. You will now have to be an active interface between the two parties and get your medical expenses reimbursed. Here’s a quick guide to what you would need to do in such a situation.

Reimbursement process

Typically, a health insurance policy reimburses expenses incurred during, before and after hospitalization. When you need to make a claim through the reimbursement mode, you need to file all the original documents with your third-party administrator (TPA), the intermediary who settles the claim between the hospital and the insurer.

These documents include discharge summary report, investigative report, scans, bills and receipts. In order to file the claim, you need to inform your insurer within seven days from the day of discharge and file the claim within the next 30 days.

Says Deepak Mendiratta, managing director, Health and Insurance Integrated, a health insurance consulting organization: “For planned medical procedures, insurers may also want you to intimate them 24 to 48 hours before you get admitted. However, after about a month your insurer may refuse to settle your claim unless you have a strong reason for delaying the claim filing procedure.”

The TPA gets your documents validated. On the non-medical side, your credentials are checked and on the medical side, TPAs look out for any policy exclusions or pre-existing diseases. Normally, this process takes about a month after which you get a cheque.

Remember that this process can get terribly delayed if the TPA finds any disparity and raises a query. The disparity could arise on account of non-submission of original documents or incomplete documents, claim on account of a pre-existing disease or a policy exclusion (the list of ailments that are not eligible for the cover as per your policy documents). The onus of filing the claim rests on you and, therefore, you need to ensure that you have all the documents in place.

Cashless process

If your hospital comes under PPN, you will still be able to avail the cashless facility. Though standardizing rates are still being worked out, that may not affect your claim process because you are not supposed to spend a single rupee on your own. In the hospital, you have to show your TPA card and fill the authorization form. The hospital then takes it up with the TPA. The TPA will check the documents and approve or reject the authorization. In the meantime, you will be admitted to the hospital and your treatment will begin. If the TPA rejects the authorization, you will have to foot the bill and then follow up with the TPA. On approval, your treatment is cashless.

At present, private insurers are not a part of the PPN system and are still offering cashless treatment to their policyholders. Says
Neeraj Basur, director, finance Max Bupa Health Insurance Co. Ltd: “We don’t have TPAs and we directly engage with the hospitals. This helps us to know their pricing and therefore we can assess if they are charging more from policyholders.”

Mint Money take

In case you have a claim coming up in the near future and have a policy from state-owned insurers, choose your hospital carefully or organize cash before you check in.