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Updated: July 20, 2010 19:35 IST

Insurance companies, private hospitals in ‘unhealthy' conflict

Afshan Yasmeen
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NEEDLE OF SUSPICION? Private hospitals say there are black sheep in every sector, but the insurance companies should not generalize. Photo: Bhagya Prakash K.
THE HINDU NEEDLE OF SUSPICION? Private hospitals say there are black sheep in every sector, but the insurance companies should not generalize. Photo: Bhagya Prakash K.

Hospitals say bills worth crores of rupees yet to be cleared

Private hospitals are worried; they claim that bills worth crores of rupees have not been cleared by medical insurance companies.

Hospitals affiliated to the Private Hospitals and Nursing Homes Association (PHANA) claim insurance companies have not cleared many of their bills related to cashless treatment from 2004 to 2009. Some bills have been held up since 2002 on “trivial grounds”, they say.

PHANA had sought the intervention of the Insurance Regulatory and Development Authority (IRDA) last year.

No action

In a letter on June 10, 2009 to IRDA Chairperson J. Hari Narayan, PHANA president H. Paramesh and Secretary Madan S. Gaekwad threatened to stop cashless treatment facility to policy holders if the pending bills were not cleared by insurance companies and Third Party Administrators (TPA).

TPAs are those who vet bills and recommend the sum that can be released by insurance companies.

Until now, the IRDA has not acted, Dr. Paramesh said. The association plans to follow it up.

Black sheep

Admitting there were hospitals that fabricated bills, Dr. Paramesh said: “There are black sheep in every sector, but let the insurance companies not generalise. Let them take action against individual hospitals if there are complaints. Our association will cooperate to get such hospitals punished. But this should not be the reason to hold back bills of all hospitals on trivial grounds.”

PHANA joint secretary Aravind Gubbi said such huge pending bills would seriously affect the financial health of hospitals.

“It was collectively felt that if urgent and genuine efforts were not made by the administrators and insurance companies to clear the bills, all hospitals will be forced to stop cashless service,” he said. The association suggested that cashless facilities be given only to critical and emergency cases.

‘Hospitals pressured'

Urging the IRDA to make possible time-bound direct payment from the insurer to the hospitals, Dr. Gubbi claimed that the administrators were “forcing all hospitals to agree to a rate list agreeable to insurance companies”.

“Most of our members objected as they felt reduction in the charges would lead to serious compromise in the treatment. The impression that private hospitals work only for profit is false as our margin is around 15 per cent, barely enough to survive with rising input and operating costs which escalate 15 per cent annually,” he added.

Charge denied

Ramesh Karmegam, vice-president of Medi Assist, a TPA that coordinates for all administrators, denied the charge levelled by the hospital association. He claimed that neither the administrators nor the insurance companies owed any money to the hospitals.

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