The government said on Tuesday that the system of the Preferred Provider Network of hospitals under the cashless mediclaim facility was expected to help reduce claims and lower the premium rates for policyholders.
In response to a Calling Attention Motion Notice in the Rajya Sabha, Minister of State for Finance Namo Narain Meena said that the public sector general insurers that sell mediclaim had not withdrawn the cover or the facility of cashless treatment, and they had only started rationalisation of empanelment of hospitals and standardisation of rates and specified procedures followed by the hospitals.
The minister said that starting July, in four cities -- Delhi, Mumbai, Bangalore and Chennai -- the PPN system had been put in place to include only those hospitals that have agreed to work at given rates for specified procedures. In the rest of the country, the earlier process of rendering cashless facility was still continuing.
To minimise inconvenience to the insured, third party administrators have been advised that for emergency and trauma cases, cashless facility should be provided not only at hospitals within PPN but at other hospitals also.
Apart from the cashless facility under PPN, the settlement of claims on reimbursement basis continues to be available for all hospitals (including non-network).
Meena said that the Standard Health Insurance Policy did not provide for any assurance of cashless facility to the insured.
However, in cases where a mention of cashless facility has been made, it has been mentioned that the claims in respect of cashless facility would be through the agreed list of network hospitals, nursing homes and day care centres, and is subject to pre-admission authorisation.
At present, there are 449 hospitals from the four cities (Delhi -- 163, Mumbai --121, Chennai -- 84 and Bengaluru -- 81).
The public sector insurance companies have a cost ratio of around 140 per cent of the premium received under the health portfolio.
"The mounting losses in this portfolio are a matter of serious concern for them. It was also observed by these companies that some of the hospitals were charging the patients having health insurance policies at rates which are quite higher than the reasonable cost of treatment.
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," the minister said.
