The General Insurance Council (GIC) has published a schedule of rates for the treatment of covid-19
Hospitals say the package rates are very low and won't cover the cost of treatment
With the aim to lower disputes between insurance companies and healthcare providers, the General Insurance Council (GIC) on Monday published a schedule of rates for the treatment of covid-19, a respiratory disease caused by the novel coronavirus. The rates are based on suggestions made by a Niti Aayog panel. However, hospitals do not seem to agree with the rates.
Covid treatment rates
The proposed rates shall be applicable to both cashless and reimbursement claims in all states where government authorities have not prescribed standard charges for covid-19 treatment.
The GIC has proposed different rates per day for NABH-accredited hospitals and non-NABH-accredited hospitals based on the severity of the case.
For moderate sickness which requires isolation beds including supportive care and oxygen, hospitals are asked to charge ₹10,000 per day in a NABH-accredited hospital and ₹8,000 in a non-NABH accredited hospital. The rates include cost of personal protection equipment (PPE) at ₹1,200.
For severe sickness which requires admission in an intensive care unit (ICU) without ventilator, hospitals are allowed to charge ₹15,000 and ₹13,000 respectively (including ₹2,000 for PPE costs).
Finally, in case of very severe sickness where the patient requires ICU with ventilator care, hospitals can charge ₹18,000 (NABH-accredited) and ₹15,000 (non-NABH-accredited).
These rates include the cost of consultation, nursing charges, room stay, and meals, covid testing, monitoring and investigations, biochem and imaging, physiotherapy, PPEs, drugs and medical consumables, biochemical waste management, bedsides procedures like Ryle’s tube insertion and urinary tract catheterization.
However, interventional procedures such as central line insertion, chemoport insertion and bronchoscopic procedures, and high-end drugs such as immunoglobulins and meropenem are not included in the prescribed rates. Such items shall be charged at MRP by the hospital. Further, high-end investigations such as MRI and PET scan will also not be included.
Hospitals in non-metro state capitals shall charge 90% of the prescribed rates whereas all other cities and towns shall charge 75% of the rates. According to the circular, metro cities include Delhi NCR, Mumbai Metropolitan Region, Kolkata Metropolitan Region and Chennai Metropolitan Region.
Hospitals, however, are not in agreement with the council.
Viren Shetty, executive director and group chief operating officer, Narayana Health, said the package rates are extremely low and won’t cover the cost of treatment. “Several state governments fixed the per day cost of covid treatment for below poverty line (BPL) patients which are also very low. Hospitals weren’t given a choice to refuse and were told to make up for the losses from cash and insured patients."
Hospitals, we spoke with are not in agreement with the rates suggested by GIC. “Hospitals aren’t in agreement with the general insurance cartel rates because they are trying to piggyback on the government enforced rates to pad up their profit margins," said Shetty.
Healthcare providers are of the view that GIC should’ve consulted them before fixing the rates and that the scheduled rates can only be managed in general wards with basic level of care, general medicines and minimal staff.
“They (GIC) should’ve discussed this with all stakeholders first. All of this could have been solved if they simply sat with the hospitals and agreed on a joint solution before unilaterally deciding that insured patients also get BPL rates," said Shetty.
Dr Raajiv Singhal, group CEO, Care Hospitals, said various bodies are trying to fix rates for the hospitals without understanding the cost of delivery of healthcare under the current circumstances.
He said fixing the rates is not a solution because the challenges are on multiple levels. “The infection control processes are different, air conditioning systems are changed, procurement cost and logistics cost are separate and the staff costs too are relatively high. All these things should be taken into account. Hospitals don’t want to make more money but we want to be able to pay the required salary and wages to the staff who are risking their lives," said Singhal. “Insurers must find a different way to deal with this. Each patient is different and requires a different degree of treatment based on co-morbid conditions and other requirements. Fixing certain costs such as bed and ventilator charges is okay but the rest can’t be pre-decided."
Insurers said attempts to standardize treatment costs have been made in the past for various procedures but it’s only on paper. Even for covid-19, a few states such as Maharashtra prescribed standard rates but insurers are not seeing any change in billing.
“We are seeing stories of people being asked to pay a huge sum as deposit. While fixing rates is a good starting point and is sending out a message that regulation is required, there’s a long way to go," said the chief underwriting officer of a general insurance company who didn’t want to be named.
In the absence of a regulator for healthcare providers, insurers aren’t very optimistic about hospitals adopting the standard rates.
If hospitals don’t agree with the prescribed rates, policyholders could lose as insurance companies will want to pay according to the package rates and hospitals may continue to bill as per their discretion, said the expert quoted above.
Joydeep K. Roy, partner and leader insurance, PwC India, said as a body of insurers, it’s GIC’s prerogative to decide how much they want to pay. “Normally in a health insurance policy, consumables such as PPE kits are not covered but now the council is asking insurers to pay for this. Therefore, policyholders stand to gain even if the PPEs are billed over ₹1,200. A lot of items that were excluded earlier are included in these rates," said Roy.
Insurers said standardizing costs, especially for cases that are mild to moderate, is fair and since there’s no historical data for covid-19, some hospitals are going overboard with the pricing. Fixing rates, however, could push more hospitals to deny cashless claims which require the insurer’s pre-approval. Policyholders may then have to check with the hospitals before admission.
Sanjay Datta, chief, underwriting, claims and reinsurance, ICICI Lombard General Insurance, said having standard and rational rates will help policyholders protect the sum insured specifically in floater policies as multiple persons under one policy may be infected given the nature of the virus.
The council said it shall review the charges every month to ensure it does not cause any hardship to the policyholders.
How the standardization will pan out and whether hospitals will abide by these rates remains to be seen.