Focus: Hospitals In Hyderabad Denied 'Cashless Insurance'

By Arhaan Faraaz | Hyderabad

A tussle between insurance companies, TPAs and hospitals over a standard treatment protocol is depriving patients of a cashless health insurance cover. While the premium amount is rising, TPAs (third party administrators) are increasingly rejecting cashless claims and asking patients to pay hospital bills and promising to reimburse the money later. 
    
According to estimates, about 35% of patients are forced to get the claim amount reimbursed, despite having cashless facilities.
“Since I have cashless insurance, I was not worried when I admitted my husband for an emergency surgery in Secunderabad last week. But to my horror, the insurance company asked me to pay and claim reimbursement, while the hospital refused to budge unless I deposited some money first,” said Sunitha Reddy, a local resident. 

An insurance expert said TPAs try to find lacunae and reduce payments often, citing unnecessary medical tests and inflated bills. For instance, if a patient has insurance cover for Rs 2 lakh and the hospital bill runs up to Rs 1.5 lakh, TPAs are willing to pay only Rs 80,000. 
    
“It’s a blind game as you don’t know now much you will get. Cashless treatment has been stopped for many of the hospitals and nursing homes. Consumer has to go for reimbursement that gives discretionary power to TPA to refuse or reduce claims,” said Gaurang Damani, a social worker based out of Mumbai. According to modest estimates, out of 37 lakh claims made last year, about six lakh claims are still pending. 

Based on a Public Interest Litigation filed by Damani, the Insurance Regulatory and Development Authority of India (IRDA) came out with consumer-friendly regulations for the entire medical insurance (mediclaim) industry in February 2013, but it has not been implemented yet. 
    
Further, Damani says there was never any public audit of the claims sanctioned by the insurance company and the actual amount disbursed by TPAs. “Of late, a lot of people are being denied the cashless facility because hospitals have an issue with the tariffs and are unwilling to be a part of network hospitals unlike earlier,” said Ramana Reddy, an Insurance expert. “People end up paying anywhere from 20% to 40% of the bill. The bigger the hospital, the larger the variation,” he added. 
    
Hospitals authorities, who are accused of inflating bills have a grouse as well and say they are unhappy with the TPAs. They say TPAs never honour payments to hospitals and cited nearly year-old pending payments. But as per norms, they are supposed to complete the payment process in 45 days. 
    
TPAs now have started taking money for empanelment. Whoever is obliging is paid well. This has come to the notice of AP Private Hospitals and Nursing Homes Association (APNA) and a complaint was lodged with IRDA,” said Dr Krishna Prasad, vice president, APNA.