Times of India
15 July 2010
By Arnab Ganguly & Udit Prasanna Mukherji
Kolkata, India

The no–cashless crisis that has hit Mumbai and Delhi hospitals is not too far off and can lash Kolkata any day.

Phones at the offices of third party administrators (TPA) in the city have not stopped ringing ever since the refusals made it to the headlines. Most calls are from frantic consumers who want to know whether they have to pay from their own pocket the next time they get hospitalised.

Feeling the heat, major hospitals in Kolkata are fighting to find a way out. At the bottom of the problem is inflated bills, a charge of which city hospitals cannot be absolved of. Again, once the cashless facility is denied, those hit the hardest will be the patients and their family members. Among all patients getting treated at private hospitals around 25% to 30% avail of the cashless provision.

“Some hospitals in Kolkata are overcharging. This can’t be denied and has to be stopped. We have started the process with Delhi and Mumbai. Chennai and Bangalore are next on the list. After that we will turn to other Metros including Kolkata,” said an official of National Insurance Co Ltd.

On Thursday, the Association of Hospitals of Eastern India (AHEI)– a conglomerate of major private healthcare providers in the city– will hold a meeting.“We will discuss the issue there,” said P Tandon, CEO Belle Vue and president of AHEI.

“There are loopholes in the system and have to be plugged. The insurance companies and hospitals have to come together and work out a solution. Fixing base prices could work out well,” said Rupak Barua, COO of CMRI hospital.

A possible solution being projected by the hospitals is fixing the rates of services at the hospital, based on a classification of the hospital according to its number of beds and facilities available.

“Setting up basic rates appears to be the best solution in sight. It will benefit everybody. The infrastructure available with the hospitals can determine the category into which they will be clubbed,” said a senior executive of a city–based Third Party Administrator.

At this moment, the public sector insurance companies haven’t issued any instructions to the TPAs but the possibilities of a ban aren’t ruled out. Health insurance providers in the private sector like ICICI Lombard and Bajaj Allianz haven’t yet taken any such decision. When contacted spokespersons of both the companies said that they weren’t taking any drastic measures yet. Sources in Star Health also ruled out any such move.

In Kolkata, hospitals and TPAs have been at loggerheads for years now. In December 2007, five TPAs were blacklisted by some of the big hospitals in the city for pending dues.

The issue is yet to be sorted out. Consumers who were enlisted with these companies found themselves at the receiving end as they were denied cashless as well as reimbursement.

If the insurance companies in consultation with TPAs decide on delisting hospitals, as has been done in Mumbai and Delhi, patients will be able to get reimbursement but not cashless services. For Delhi and Mumbai, insurance companies had asked the TPAs to prepare a list of hospitals which were“guilty of inflating bills.” The hospitals were asked to mend their ways. Those who toed the line have been spared the rod, while the rest were served with a cashless–ban.

Some of the TPAs in Kolkata suggest that even mediclaim cardholders can be classified and be directed which hospitals they can go to.“This can be done on the basis of the sum insured of the mediclaim policy. Some complications can be sorted out. A patient with a mediclaim policy already knows how much he can spend through the card. So he should go to a hospital where he can get the treatment within the credit limit,” suggest a TPA official.

TPAs have identified some problem areas where the hospitals are able to exaggerate the bills. One such area is the visiting consultant’s fees.“There is just no cap to what a doctor may charge from a patient. The hospitals claim that they can do nothing about it since the doctor is a consultant and the patient wanted him. This has to be sorted out,” a TPA official said.

Of late TPAs have started investigating cases where patients have had extended stays in the hospitals.

Insurance broking firms are not too happy with the developments in Delhi and Mumbai.“If the insurer doesn’t want to continue with a particular hospital, it is fine. But changing policy facilities midway is unfair,” said V Sahgal, managing director of Bajaj Capital Insurance Broking.