Cashless hospitalization: A tension free option, but is it delivering the promise?

Cashless hospitalization: A tension free option, but is it delivering the promise?

By Murlidhar Shrivastav

How beautiful the life would have been if there were no diseases. But this could only be a wishful thinking; far from the reality.

Perhaps the greatest urgency of money that a common man needs in his/her life is when he or his family members fall sick. Because this is something he just can’t ignore. He has to get it treated no matter what the cost would be; borrow money or sell assets. And these days the cost of medical treatment is rising much more than the inflationary level of the economy. We can attribute it to the 5 star & 7 star medical hospitals that have grown rapidly in the country. It is a fact that a major part of a common man’s saving goes in this uncalled for and sudden demand of cash.

Cashless hospitalization

Cashless hospitalization goes one step ahead from the normal health insurance schemes. It is a kind of policy, which allows you to get treatment at a hospital without having to pay anything at the hospital. In normal health policies, you get treated in a hospital, but have to settle the bill yourself and claim from the insurance company after submitting the bill as reimbursement later on.

In cashless hospitalization the insurance company or their TPA s (third party administrators) settles the bill directly with the hospital. A TPA is an intermediary between the insurance company and the hospital. You need not have to worry about arranging funds before moving to a hospital in case of a medical emergency that needs hospitalization. You, however, can go only to a network or designated hospital as listed by your insurance company. Other than the network hospitals, this cashless hospitalization facility will not apply.

Delivering the promise?

Unfortunately, for many, the delivery of cashless hospitalization policy has not lived up to the promise. Ideally, with cashless settlement you should go to a network hospital, give them your card number and get treated without paying even a rupee.

But there are many incidences when the things have not worked as it should have.  There are many instances when TPA has not paid the full amount. The insurer had to run for months before getting their money from them. In some other cases in spite of producing cashless card at the hospital, the patient has been asked to deposit certain amount upfront and it get it reimbursed later on from the TPA. A cashless facility becomes useless if these types of incidence occur.  You may listen to tall claims from insurance agents about the timely approval and disposal of claims but in reality it takes much more than that.

But it is not that only the insurance companies or TPAs to be blamed. Most working people these days have a cashless policy purchased for them by their company. They are thus not fully aware of the details of the policies and make mistakes like not sending an authorization request in advance in case of surgeries or asking coverage for a pre-existing disease and likes. In such situations, when a TPA rejects their request, they feel deceived.

Many Hospitals too have dual policies. If you have insurance coverage, they will charge you more than the person who does not have the insurance.  This makes the reimbursing authorities irked so much so that many insurance companies have stopped direct payment of cashless treatment charges to more than 150 hospitals in New Delhi and NCR. They claim that several hospitals are making fake claims, and giving exaggerated bills thereby cheating the insurance companies resulting in their losses.

Hospitals in their defense say that they charge more from the insured patients because whereas they get the immediate payment in case of non insured person, in case of insured, insurance companies take up to six months to clear the bills. This long turnaround time by the TPAs is the main problem. The TAT for the payment in an affiliated hospital is only 20 days for cashless treatment but most TPAs go far beyond this. As a result many hospitals too have started to refuse cashless services.

But all said and done, cashless hospitalization is a wonderful product mooted by the insurance companies. It gives a common man much relief in emergency situations. Hope the problems are sorted out and the common man, the poor medical insurance policy holder, does not suffer.