Hospitals vs insurers: Policyholders bear the brunt of rising medical costs

The ongoing tussle between several private hospitals and insurance companies over reimbursement rates and cashless claims has again trained the spotlight on the plight of policyholders, who experts believe were at the receiving end amid soaring medical inflation.

- ANJALI SINGH, AATHIRA VARIER & SANKET KOUL

The simmering conflict came to a head last month when Niva Bupa suspended cashless services at Max Hospitals on August 16, citing unresolved reimbursement issues. Just days later, the Association of Healthcare Providers India (AHPI) advised member hospitals to suspend cashless hospitalisation for Bajaj Allianz, also flagging Care Health over similar pricing and settlement delays. The deadlock lasted eight days before partial resolutions emerged.

Industry veterans say such tussles are neither new nor unique to India. “Hospitals will always say that the rates are not good enough and insurers will always say it is very expensive. This is true for any country,” said a hospital executive requesting anonymity.

At the centre of the latest flashpoint lies the common empanelment program, launched to streamline cashless access and reduce multiple contracts. According to the executive, “The common empanelment is creating friction. The smaller hospitals will get squeezed more, because they have lesser negotiating power.”

Common empanelment initiative by the Insurance Regulatory & Development Authority of India (Irdai) in collaboration with General Insurance Council was designed to create a unified, nationwide cashless hospital network for policyholders and hospitals.