Emergency "Cashless" claims to be restored
Aug 06, 2010

Author: PersonalFN Content & Research Team

State-owned insurers and corporate hospitals will restore with immediate effect, cashless medical claims for the treatment of emergency cases. The emergency cases would include treatment for cardiac surgery, intensive care and trauma.

Thus now, this will lead to a wave of relief for the policyholders, who were bearing the brunt of a decision by New India Assurance Co. Ltd., Oriental Insurance Co. Ltd., United India Insurance Co. Ltd. and National Insurance Company to stop cashless insurance reimbursements in a few big hospitals on July 1, 2010.

Earlier, State-owned general insurers had fumed over the fact that the hospitals were overcharging the customers which resulted in losses for them (general insurers). According to Mr. G. Srinivasan, Chairman and Managing Director of United India Insurance Co. Ltd., at present health insurance claims make up for about 115% of their company’s premium. Moreover, with operational expenses, these claims have been running into 140%, for the past 4-5 years.

Agreeing to general insurer’s dilemma, Dr. Naresh Kumar Trehan - Chairman and Managing Director of Medanta said “Insurance companies have legitimate concerns, as the premium collection is disproportionate to the payment they make to hospitals. But there may be only sporadic cases of overcharging by some hospitals and charges vary depending on the medical expertise and services.”

IRDA Chairman - Mr. Hari Narayan, expressed his views on this saying that the current dispute is a commercial transaction between hospitals and insurers. IRDA would step in only if there is a breach in contract between policyholders and insurer.

We believe that there is a need to have a long-term solution to this cashless medi-claim issue, which has surfaced due to self-centric interests of doctors and hospitals. In our opinion, IRDA should come up with stringent regulations and even define certain terms such as hospitalisation cost, critical illness and fees charged by doctors, which will preclude the malpractice of hospitals and doctors in charging the insured on the basis of value of health cover and cash facilty available.