State-run insurers not to withdraw cashless reimbursement

NEW DELHI - State-run general insurance companies will not withdraw cashless health or accidental insurance products and customers can avail such services from the network of hospitals approved by the insurer, the government said Tuesday.

“The public sector general insurance companies have not withdrawn the facility of cashless treatment,” said Minister of State for Finance Namo Narain Meena in a written reply to the Rajya Sabha.

“However, they have started rationalisation of empanelment of hospitals and standardisation of rates and specified procedures followed by the hospitals,” Meena said, as hospitals were overcharging patients who were covered under an insurance policy, which had cashless options available.

The minister was responding to a notice enquiring if media reports were true that state-run insurers were withdrawing cashless policies in the wake of rampant overcharging by hospitals.

“Due to these high charges, the policyholders were left with smaller amounts of sum assured to be used for any other eventuality during the remaining period of the health policy thereby causing undue hardships to them,” said Meena.

As per the new structure being implemented by the public sector insurance firms, a preferred provider network has been started by inclusion of names of the hospitals that have agreed to work at reasonable rates from July 1 in Delhi, Mumbai, Bangalore and Chennai.

“In the rest of India the earlier process of rendering cashless facility is still continuing. In selection of the hospitals care has been taken to ensure geographical spread of the hospitals for the convenience of the insured,” the minister said.

To minimize inconvenience to the insured, third party administrators have been told that for emergency and trauma cases, cashless facility should be provided not only at hospitals within the approved network but at other hospitals also.

Apart from the cashless facility, the settlement of claims on reimbursement basis continues to be available for all hospitals (including non-network).

The minister also said the public sector insurers had a cost ratio of around 140 percent of the premium received under the health portfolio.