Cashless mediclaim isn’t for everyone

Within days of his salary being credited, Kunal usually finds himself broke. By the time loan payments, groceries, children’s tuition fees and other expenses are done with, he’s left with a pittance in his bank account.

Do you identify with Kunal? If so, a sudden cash requirement on account of a medical emergency can be very hard to cope with. A cashless mediclaim policy can come to your rescue.

In such a policy, the insurer makes direct payments to the hospital for various expenses. You need not worry about filing bills or running for money at a crucial time. But it’s not all sanguine either. Cashless policies come with some restrictions, so weigh the pros and cons before you buy a policy.

Each insurer ties up with hospitals across India. These form the insurer’s preferred provider network (PPN). In case of a cashless claim, you must necessarily be treated in a PPN hospital.

If you want treatment in a non-network hospital, then your claims will only be settled through reimbursement – that is, you first foot the bills yourself and then later submit these to the insurer to be recompensed.

Insurers do have a large hospital network. But availability depends on your location. So before taking a policy, check the preferred provider network.

In a cashless claim process, you need to inform the third-party administrator (TPA) at the time of admission to a hospital. Always keep all policy details handy, wherever you go.

On its part, the hospital will inform the TPA if it’s a planned hospitalisation or an emergency admission and give the patient’s diagnosis.

An estimation of cost will be provided as well. Once all information is collated, the TPA will make the initial authorisation. This is the amount the insurer agrees to pay the hospital to start the treatment. Some insurers guarantee a turnaround time for initial authorisation.

Says Ravinder M, National Head – Rural, Accident and Health, TATA AIG General Insurance, “The pre-authorisation process is as simple as contacting the admission counter at the hospital and faxing the filled and signed copy of the pre-authorisation form to Tata AIG. They generally try to pre-authorise within two hours, but at the most, it goes up to four hours. The delay could happen because of delayed document submission by the customer or incomplete forms submission by the hospital.” Take comfort from the fact that hospitals usually don’t withhold treatment for want of authorisation.

RKT Krishnan, Director and Chief Executive Officer of GHPL, among the leading TPA service providers, says, “Generally, the agreement between the hospital and TPA provides that for the first 24 hours, hospitals will not ask the patient to pay for any expense that is covered under the policy − this provides time for the TPA to evaluate the request."

"However, the hospital may require a deposit to cover any expense not covered in the policy and an assurance that the patient will pay if the cashless claim is rejected due to some reason, say, for instance, a pre-existing condition,” he adds. Keep in mind that some expenses at the hospital have to be borne by you. These may be the admission fee, attendant pass and expenses on the laundry service.

Krishnan says, “If the policyholder wants to stay at the hospital in comfort, with an additional bed for the attendant and an extra television, the insurer doesn’t foot that bill.”

Also, there are worries that hospitals over-bill patients on cashless facilities.

Sudhir Sarnobat, CEO at Medimanage Insurance Broking, says, “There are a few examples we have encountered where the hospital has asked for a different billing pattern, as the same is on a cashless basis. The hospital’s arguments are that the TPA does not pay the full amount after settlement of the claim. As the patient has already left, the loss has to be borne by the hospital. Also, the payment for bills is received after 60-90 days, as against cash paid by patient at the time of discharge.”

Unfortunately, if the hospital does over-bill, you will suffer, as that eats into your sum assured.

The discharge process can also take time in a cashless facility. The TPA will not foot the bill till the claim is validated and bills checked thoroughly. If you opted for a co-pay on the policy, the hospital will make one separate bill for you at the time of discharge.

So if you wait two hours for discharge in a normal case, in a cashless case, it may be three-to four hours, say industry experts.

Even with irritants such as these, a cashless mediclaim policy may be better than a reimbursement one. In the latter, you need to collect all bills and submit them to the insurer within the set time frame, and, if any bills are missed, go back to the hospital for them. You also have to contend with several days of anxiety as you wait for the reimbursement to come through.