The General Insurance Council (GIC) has begun rolling out the regulator's common empanelment of hospitals, with a target to onboard 4,000-5,000 hospitals in the coming months, which will have uniform pricing terms.
Starting with 600 eye hospitals and over 100 general hospitals, the initiative seeks to streamline cashless treatment in line with government health programmes, such as the Pradhan Mantri Jan Arogya Yojana (PMJAY). Despite resistance from large multispecialty chains, the move will offer insurers better claims control.
In FY24, the industry settled 26.9 million claims. Could this bring down health insurance premiums? ET explains.
What is the common empanelment process?
In January, the Insurance Regulatory and Development Authority of India ( IRDAI) introduced a common empanelment system requiring all general insurers to jointly onboard hospitals with standardised terms and rates, similar to those under PMJAY. The goal is to expand cashless treatment across a wider network.
Currently, around 30,000 hospitals are empanelled under the government's Ayushman Bharat Yojana. However, these are mostly government hospitals, including the private sector, India has over 70,000 hospitals.
A key feature of common empanelment is that hospitals will no longer need separate agreements with each insurer. Instead of having separate agreements with multiple insurance companies, one agreement with the common network would suffice.
Does it help policyholders?
A wider network will mean that the customer could have cashless access at more hospitals. With a unified network, switching insurers won't affect access to cashless facilities. Similarly, top-up policies from different insurers can be used more seamlessly.
If a hospital is empanelled with insurance companies, policyholders can get treated without paying upfront - insurers will settle the bill directly, ensuring cashless treatment.
Who is implementing it and how?
GIC, along with insurance companies, is leading the rollout. So far, the council has approached over 600 eye hospitals and 150 general hospitals. The initial focus is on procedure-based specialities like cataract and lasik before scaling up to general hospitals. The target is to cover 4,000-5,000 hospitals in the next 2-3 months.
Why are eye hospitals being targeted first?
Eye care involves fewer complex procedures where pricing and procedures are relatively minimal. Cataract surgery - widely used by senior citizens - is one of the most common procedures, and growing cashless access will be facilitated by widening the panel of eye hospitals.
What are hospitals concerned about?
While some hospitals support the initiative, larger multispecialty chains are wary of standardised pricing, fearing it could hurt their profitability as their cost structure is high. They are concerned about delayed reimbursements.
Additionally, some empanelled hospitals have raised concerns about friction with insurers over claim rejections and unexplained deductions. For instance, in Ahmedabad, hospitals accused insurers like Star Health, Care, and Tata AIG of arbitrary claim denials and delayed price revisions. Some were even delisted without prior notice. The Ahmedabad association of hospitals had threatened to discontinue cashless services with these three.
Will this reduce premium costs for policyholders?
That is the goal. Standardisation of packages and billing practices could reduce treatment costs. If hospitals agree to fixed rates, insurers can better control claim payouts. Lower claims mean lower costs for insurers, which could eventually lead to more affordable premiums for policyholders.
So, your health insurance premium may not fall immediately, but it's possible if this experiment works.
Starting with 600 eye hospitals and over 100 general hospitals, the initiative seeks to streamline cashless treatment in line with government health programmes, such as the Pradhan Mantri Jan Arogya Yojana (PMJAY). Despite resistance from large multispecialty chains, the move will offer insurers better claims control.
In FY24, the industry settled 26.9 million claims. Could this bring down health insurance premiums? ET explains.
What is the common empanelment process?
In January, the Insurance Regulatory and Development Authority of India ( IRDAI) introduced a common empanelment system requiring all general insurers to jointly onboard hospitals with standardised terms and rates, similar to those under PMJAY. The goal is to expand cashless treatment across a wider network.
Currently, around 30,000 hospitals are empanelled under the government's Ayushman Bharat Yojana. However, these are mostly government hospitals, including the private sector, India has over 70,000 hospitals.
A key feature of common empanelment is that hospitals will no longer need separate agreements with each insurer. Instead of having separate agreements with multiple insurance companies, one agreement with the common network would suffice.
Does it help policyholders?
A wider network will mean that the customer could have cashless access at more hospitals. With a unified network, switching insurers won't affect access to cashless facilities. Similarly, top-up policies from different insurers can be used more seamlessly.
If a hospital is empanelled with insurance companies, policyholders can get treated without paying upfront - insurers will settle the bill directly, ensuring cashless treatment.
Who is implementing it and how?
GIC, along with insurance companies, is leading the rollout. So far, the council has approached over 600 eye hospitals and 150 general hospitals. The initial focus is on procedure-based specialities like cataract and lasik before scaling up to general hospitals. The target is to cover 4,000-5,000 hospitals in the next 2-3 months.
Why are eye hospitals being targeted first?
Eye care involves fewer complex procedures where pricing and procedures are relatively minimal. Cataract surgery - widely used by senior citizens - is one of the most common procedures, and growing cashless access will be facilitated by widening the panel of eye hospitals.
What are hospitals concerned about?
While some hospitals support the initiative, larger multispecialty chains are wary of standardised pricing, fearing it could hurt their profitability as their cost structure is high. They are concerned about delayed reimbursements.
Additionally, some empanelled hospitals have raised concerns about friction with insurers over claim rejections and unexplained deductions. For instance, in Ahmedabad, hospitals accused insurers like Star Health, Care, and Tata AIG of arbitrary claim denials and delayed price revisions. Some were even delisted without prior notice. The Ahmedabad association of hospitals had threatened to discontinue cashless services with these three.
Will this reduce premium costs for policyholders?
That is the goal. Standardisation of packages and billing practices could reduce treatment costs. If hospitals agree to fixed rates, insurers can better control claim payouts. Lower claims mean lower costs for insurers, which could eventually lead to more affordable premiums for policyholders.
So, your health insurance premium may not fall immediately, but it's possible if this experiment works.
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