Home / News / India /  Hospitals can’t deny cashless claims: Irdai

All hospitals must provide cashless payment facilities, the insurance regulator on Tuesday said after Mint reported last week that hospitals in some parts of the country were denying such facilities to covid-19 patients.

Such patients in some states are having to deal with hospitals denying cashless claims offered by their insurers, adding to their distress at a time of crisis.

With private hospitals claiming their hands are tied, family members have had to frantically arrange large sums of cash at short notice.

On Tuesday, the Insurance Regulatory and Development Authority of India (Irdai) issued a circular with a series of instructions aimed at discouraging healthcare providers from taking large sums of money as deposits from patients and denying them cashless claims.

“It is clarified that the policyholders are entitled to cashless facility at all such network providers (hospitals) with whom the insurance company/TPA (third party administrator) has entered into an agreement in accordance to the norms of service level agreement (SLA)," said Irdai in its circular.

In case of denial of cashless facility, it said, policyholders can file a complaint by writing to the grievance redressal officer of the insurer, the details of which would be on the company’s website.

Insurers have been told to put in place an exclusive grievance redressal mechanism to address complaints relating to the denial of cashless claims.

In cases where a policyholder’s interests have been adversely affected because of the conduct of the hospital, Irdai said these should be immediately reported to the appropriate government agencies in the state or area.

The regulator directed all general and standalone insurance companies as well as third-party administrators or TPAs, who process insurance claims, to publish a list of hospitals on their websites.

All these hospitals shall provide cashless claims facilities for all treatments, including covid-19, it said.

Hospital representatives said earlier that several insurers have not revised their cashless agreement rates in the last four years and, given the medical inflation, the old rates are untenable.

Also, due to the pandemic, hospitals are cash-strapped, and the finances only get worse if insurers don’t settle claims on time.

Insurance experts Mint spoke to said Irdai can only issue an advisory, on the basis of which insurance companies can negotiate with hospitals. However, hospitals cannot be forced to comply with the circular.

“There are dialogues going on between hospitals and insurers on this as well as standardizing rates in line with the prices prescribed by the general insurance council. Negotiations and discussions with network providers are the only solutions," said the chief underwriting officer of a general insurance company, who didn’t want to be named.

In normal circumstances, policyholders have the option of choosing a hospital. But given the high infection rate for covid-19, finding a hospital bed has become a task in itself and experts said in such a situation, some amount of regulatory intervention could help in the negotiation process.

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