Times of India
10 July 2010
By Pushpa Narayan
Chennai, India

While Insurance Cos & Hospitals Battle It Out Over Charges, The Patient Who Paid Hefty Premiums Is Left In The Lurch
Several hospital chains across the country have written to the Insurance Regulatory and Development Authority (IRDA) complaining against moves by public sector insurance companies to restrict cashless transactions provided under medical health cover to their best corporate and group clients.

TOI in its edition on Friday had reported on an emerging crisis in the medical insurance sector where PSU insurers have knocked off the names of several leading hospitals across the country from their empanelled lists. The move was prompted by a rise in fraudulent claims and overbilling by certain health care providers. Since July 1, many patients, who are not part of corporate group insurance schemes, have been asked to deal directly with hospitals on their payments and then claim reimbursements instead of using the cashless facility.

On Friday, a Confederation of Indian Industry (CII) committee on health, comprising senior doctors and hospital administrators, met in New Delhi to discuss the problem. "Insurance companies and healthcare providers have always been playin g this cat and mouse game all over the world.

Things will change only if we bring in laws that will punish every stakeholder if any fraud is detected, " said senior cardio–thoracic surgeon Dr Naresh Trehan, who chairs the committee.

The current impasse has triggered a fresh round of allegations by all sides, including senior doctors, hospital administrators and consumer activists. Since consumers are getting caught in the crossfire – they have to cough up cash upfront in lakhs to hospitals even after paying hefty premiums – the CII panel has decided to recommend to the IRDA legal provisions that will plug loopholes and enable patients as well as healthcare providers and insurers to seek swift redressal in case of deficiency in service or inflated billing.

The four major public health insurance companies have removed several leading hospitals from their list of "Preferred Provider Network " since July 1 though no official communication has been sent to the hospitals. "We have written to the IRDA about the problem. We came to know about it only when our patients’ requisitions were rejected, " said Sunil Kapur, who heads the sales wing for Fortis Group of Hospitals. While most patients have been left wondering why they have not been allowed to use the cashless facility despite having paid premiums on time, the insurers say they have been bleeding due to inflated billing and "needless surgeries " carried out on policy–holders.

Hospitals, however, question the rationale of charging high premiums and providing low quality service. "Why would a person paying a high premium want to go to a hospital that has high mortality and morbidity instead of coming to a centre of excellence? " asked Dr Trehan.

The Two Sides Of The Coin

• Till things become clear on the cashless front, those patients covered under the cashless schemes would now have to pay out of their pocket if the hospital is out of the insurer’s list
• The new model would be that of co–payment where the employee will have to bear some portion of the medical expense
• The charges are high in some hospitals because of sterility, quality equipment and experienced staff. Reduction in cost will affect quality of service
• Doctors also demand the establishment of standard operating cost for procedures and punishments for frauds under the health insurance scheme