Times of India
14 July 2010
By Risha Chitlangia

Mediclaim Policy Holders Fleeced, Made to Pay More
Hospitals Charge Much Less For Govt Scheme
In the battle between health insurance companies and hospitals, policy holders are the biggest casualty. Insurance companies claim that they have withdrawn the cashless facility from high–end hospitals to “standardize the cost of healthcare and make it affordable”.

Though corporate hospitals deny the allegation of overcharging, third party administrators (TPAs) say patients are often subjected to unnecessary diagnostic tests to inflate the bills. Javed Akhtar (28), who was recently admitted to a private hospital, agrees. Last month, Akhtar, who works with a private firm in Noida, had a minor accident and was admitted at a city hospital. He gave his cashless policy number to the hospital for TPA approval. But, he found that the hospital had applied for a spinal surgery and had got Rs 80,000 cleared. “I was not even told about the surgery. They took the approval by forging my signature,” said Akhtar, who refused to get operated and got a police complaint registered. But as he didn’t get operated, the TPA refused to clear the bill.

TPAs say patients are often subjected to unnecessary tests to inflate the bill. As a result, only a few insurance claims actually get settled. “Hospitals often get unrelated tests done. More than three consultants visit the patients twice. The most expensive room is offered to policy holders for which they have to pay from their own pocket,” said an official. In most hospitals the consultant’s visit charges are linked to the room rent. Higher the room rent, more the visiting charges. In some hospitals, the cost of diagnostic tests also varies with room rent.

But hospitals say patients require tests by a multi–disciplinary team of doctors. “We can’t deny him the care because the policy doesn’t allow it. If TPAs feel that certain hospitals are overcharging, they should select hospitals clearly. The recent move by insurance firms has caused acute discomfort to the patient,” said Dr Sanjeev Bagai, CEO, Batra Hospital.

Interestingly, a private hospital gives the same facility at two prices to different patients. For example, it has lower rates for patients who come through the Central Government Health Scheme (CGHS), which provides healthcare to central government employees and their family. “A bypass surgery, as per CGHS rates, would cost Rs 1,30,000, but the same surgery would cost a policy holder close to Rs 4 lakh,” said a government doctor.

But hospitals are defiant and have decided to take it up with CII. “This will affect not only the hospital but patients too. We have to see our interest also. As for CGHS, we provide our services in only three categories: cardiac, renal transplant and joint replacement,” said Sunil Kapur of Fortis Healthcare.

New insurance companies are now experimenting with a ‘No TPA’ model to ensure hassle–free claim settlement to their consumers. The Max Bupa health insurance policy has done away with TPA. The company feels that TPAs take a lot of time to settle claims. The company also claims to be taking stringent measures to ensure its empanelled hospitals don’t overcharge. “Before we include any hospital in our network, we visit them to know the facilities available, check the published rate card and details regarding the claims etc,” said Neeraj Basur, director, finance, Max Bupa health insurance.

IRDA refuses to intervene
Insurance watchdog IRDA on Monday washed its hands of the controversy surrounding the PSU insurers withdrawing the cashless hospitalisation facility, even as industry bodies stepped up efforts to find an amicable solution to the row. “It is a matter between the insurance companies and the hospitals, there is no regulatory issue... IRDA is not looking into it,”Insurance Regulatory and Development Authority of India (IRDA) Chairman J Hari Narayan said. Concerned over the plight of patients holding mediclaim policies, industry body CII held a series of meeting with different stakeholders to resolve the controversy. Another chamber Ficci described the decision of the PSUs as “retrograde”. The controversy is over four state–owned general insurance companies taking about 150 hospitals off the list of Preferred Provider Network that offer cashless hospital services to policy holders under the mediclaim scheme.