Denial of cashless services: Onus to take action against hospitals on insurers, says IRDA

An insurance company can take action against a hospital for demanding advance from a policy holder who is supposed to get cashless service, an official of insurance regulator IRDA said on Friday. In a recent circular, Insurance Regulatory and Development Authority (IRDA) has put the onus of taking steps against medical establishments for deficiency in service on the insurer, the official said.

There has been a sharp spike in complaints post COVID-19 outbreak that private hospitals are demanding huge
advance before admission even from patients having cashless medical insurance. In the wake of such complaints, IRDA issued the circular on cashless service to policy holders by hospitals, the official told PTI.

“Where any network provider (hospital) denies cashless facility and deviates from agreed terms of the SLA (service level agreement), insurance company shall take an appropriate action against such network providers,” the circular said.

One of such “appropriate” actions is blacklisting the erring hospital, a senior official of an insurance firm said. “But any stringent action like blacklisting a hospital will also inconvenience policyholders as, in that case, the number of network hospital will come down,” he said.

The circular issued late last month also mandates health insurance service providers to immediately report to
the appropriate government agencies of the state concerned, when policyholders’ interests are adversely affected because of the conduct of network hospitals.

To address the problem of alleged inflated billing and advance deposit by hospitals, what is necessary is the intervention of the government, the official of the insurance company said. The Kolkata-based Association of Hospitals of Eastern India said that its members will not demand advance from patients having cashless insurance policies, but up to Rs 50,000 will be sought from those without it.

West Bengal Clinical Establishment Regulatory Commission, a regulatory body for private hospitals, has also
permitted private hospitals to seek an advance of a maximum of Rs 50,000 from a patient. The Association of Healthcare Providers (India), which claims to represent a vast majority of the country’s private hospitals, has suggested that the fee per day should be fixed at Rs 15,000 for patients in general wards, Rs 20,000 per day
in wards with oxygen facility, and Rs 25,000 a day for isolation ICUs.

The AHPI has also proposed that the rate per day for isolation ICUs with ventilator support can be fixed at Rs
35,000 per day. Association of Hospitals of Eastern India president Rupak Barua had said they agree to the rates of AHPI.

An official of a third-party administrator (TPA) said that hospitals earlier argued that inadmissible components
such as PPE and gloves are not paid by patients and advances were sought to cover those risks. He said that there is no clarification from IRDA about insurance coverage of PPE, gloves and other kits specifically required for COVID patients, as traditional medical policies put those as “consumables” which is not covered. However, such items are covered in coronavirus specific insurance policies, he said.