August 29, 2010

Star hospitals blink, to okay cashless deal

Cashless hospitalization facility may soon be restored at most corporate hospitals in Delhi, Mumbai, Bangalore and Chennai, with the impasse between insurers and big hospital chains on the verge of a resolution.

After intense negotiations spread over several days, a three-tier package has been worked out for 42 standard medical procedures, covering almost all common ailments requiring hospitalization.

As per the compromise formula, hospitals have been divided into three groups based on infrastructure capabilities. In Delhi, negotiations have already been concluded with Gangaram and Medicity, Gurgaon, which figure among the list of high-end hospitals. Others such as Apollo and Fortis, which have presence in other metros, are also ready to come on board on the same rates that Gangaram and Medicity have agreed to.

The Delhi hospitals that have been found eligible to charge the highest rates include Gangaram, Medanta, Max (Saket), Apollo and Fortis. In Mumbai, the category will comprise Breach Candy, Hiranandani, Jaslok, Leelavati and Hinduja. Manipal in Bangalore and Apollo and Fortis in Chennai may also make the top grade.

The complete list will be available once these hospitals sign the deals with third-party administrators (TPAs).

While 450 hospitals across these cities had already joined the cashless network, the absence of corporate hospitals constituted a vital missing link in the medical insurance chain.

Corporate hospitals had been taken off the preferred network after July 1 when they refused to standardize their treatment procedures, and agree to a package deal with insurers.

The package rates have been worked out by a committee headed by Raksha TPA CEO Pawan Bhalla who facilitates the northern region business of health insurers. Earlier, all four major public sector insurers, in consultation with high-end hospitals, had empowered a committee comprising Dr Pervez Ahmed, CMD of Max Healthcare, and Bhalla to work out a compromise on rates and a common slab for different ailments.

"The rates have been segmented into three categories because high-end hospitals cannot be pushed to accept tariffs applicable for smaller ones," said Bhalla. Once these are signed by major chains in north, the package deals will be extended to other regions.

The packaged rates, when implemented across the country, are expected to result in 20-25% savings for insurance companies which were finding it hard to stay afloat because of the hefty rates corporate hospitals charged under the old scheme. Four PSU insurers -- National Insurance Company, New India Assurance, Oriental Insurance and United India Insurance Company -- command nearly 80% of the total health insurance business.

At least 18 insurance companies, including the four public sector entities, had dropped from their designated list more than 150 hospitals in Delhi and NCR. A similar number was taken off the list in Mumbai and other cities, following allegations of overcharging that led to these insurers reporting a loss of more than Rs 2,000 crore annually on a premium of Rs 9,000 crore.

These insurance companies had been so far providing cashless services at over 3,000 hospitals in the country. But a recent study carried out by TPAs had found that only 350 of them, or roughly 11%, were consuming more than 80% of the total claims.

The four metros account for almost 50% of the Rs 9,000 crore annual mediclaim premium collected by the insurers.

In Mumbai, however, some of the high-end hospitals are still agitating on the question of a package deal. Dr Sujit Chatterjee of Hiranandani Hospital in Mumbai said it was not possible for them to sign on the rates that could be applicable in Delhi. He cited difference of real estate prices in the two cities as one of the reasons to justify the case for higher rates in Mumbai. Dr Chatterjee said at least 50 charitable hospitals like Hiranandani had refused to service CGHS clients as the rates, being so low, are simply not acceptable to them.

Link: Original Article

1 comment:

sam said...

Good decision...I must be implemented....

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