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Times of India
20 July 2011
By, Khomba Singh & Paramita Chaterjee
New Delhi, India

PSU insurance firms and hospitals agree on a new set of tariffs
Deadlock Over Cashless Payment Ends
The deadlock on cashless hospital claims has ended with four state–owned health insurance firms and all big hospitals, except Apollo Hospitals, agreeing on a new set of tariffs for certain procedures.

Negotiations between the insurers and hospitals ended last month with the two parties agreeing on revised tariffs for 42 common procedures.

The development brings relief to thousands of individual policyholders whose cashless payment facility at big hospitals had been suspended last year following allegations by the insurers that hospitals were overbilling policyholders.

“Talks are also on with Apollo Hospitals for a resolution,″ United India Insurance chairman and MD G Srinivasan said on Tuesday.

Four public–sector insurance firms — New India Assurance, Oriental Insurance, United India Insurance and National Insurance Company — had withdrawn cashless treatment facility at large hospitals in July last year, alleging that their business had become unviable as hospitals were overbilling policyholders who had opted for the cashless payment route. The four insurers collectively hold over half of the country’s health insurance market share.

They had earlier complained that their ratio of payment claims to premium was as high as 120% under the old tariff. Under the new terms, insurers have placed hospitals under five categories, based on the parameters of quality, specialty and accreditation, among others.

They have fixed different tariffs for hospitals across the categories. “With the revised tariff, we expect the claims ratio to be around 85%,″ Srinivasan said on the sidelines on an health insurance conference. The insurance regulator had also found a significant price variation in hospital bills between cashless payment and those who paid directly to the hospital.

An Apollo Hospitals spokesman said the company had already submitted its proposal (revised tariff) to the local representatives of insurers and was awaiting administrative clearances to be back on the insurers’ preferred providers’ network (PPN), where the insurers provide cashless services. Although Apollo operates about 50 hospitals across the country, only some of them in key cities were affected. “Some of them are in advanced stages of getting back in the PPN,″ he said.

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