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Cashless health insurance at all hospitals now but network hospitals are still a better option for ‘assured’ cashless treatments

General and health insurers have recently rolled out a “cashless everywhere” facility in India that allows policyholders to access cashless facilities for medical treatment in any hospital. Even if the institution is not in the network of your insurance company, you can still avail cashless treatment there. If it is a planned treatment, all you need to do is inform your insurance company at least 48 hours prior to admission to avail of cashless treatment at a non-network hospital. For emergency hospitalization, you can inform your insurer within 48 hours of admission. Previously, policyholders had to pay for treatment at non-network hospitals and then approached the insurer concerned for reimbursements.

On paper, cashless everywhere is a great initiative as it aims to reduce out-of-pocket expenses of policyholders for medical treatments. However, health insurance policyholders need to keep a couple of things in mind before opting for a cashless everywhere facility at any hospital.

Cashless health insurance: What are network and non-network hospitals?

Your insurance company usually has a tie-up with several hospitals for providing cashless treatment to policyholders. These hospitals are commonly known as network hospitals. The insurer usually negotiates rates with these empanelled hospitals to ensure more comprehensive coverage.

Cashless everywhere: How network and non-network hospitals will charge you

You need to understand if you go to a non-employed hospital, how it will charge you for the treatment.
“(In such cases), the charges will be benchmarked against the existing rates prevailing in the given geography for the type of hospital — primary, secondary or tertiary. If the hospital is already on the panel of any other insurance company, the charges will be based on the rates of the empanelled insurers,” says Mayank Bathwal, CEO, of Aditya Birla Health Insurance. “However, if the hospital is not empanelled with any other insurance company (and not in the blacklisted category), then the insurer, after validating the policy details, will coordinate with the non-network hospital and negotiate a tariff based on benchmarked rates. ”

It is clear that when you go to a non-network hospital, your insurer will negotiate the rates on a case-by-case basis, says Rajagopal Rudraraju, Executive Vice President & National Head of Accident & Health Claims, TATA AIG General Insurance.

Cashless hospitality: Will you have to pay from pocket at non-network hospitals?

Will the overall cost of treatment vary depending on whether it is a network hospital or non-network hospital? Let’s understand it with an example. Suppose, your insurance has a cap of Rs 50,000 for surgery at a network hospital. In a network hospital, you will usually get cashless treatment and so will not have to pay anything from your pocket.

If you choose to undergo the same surgery at a non-network hospital where the cost is fixed at Rs 70,000, the settlement of the claim will depend on the terms and conditions of your policy and your insurer. “If you opt for a hospital where the surgery costs exceed your insurance coverage, you will have to settle the excess amount out of your pocket,” says Nitin Deo, CTO, Zuno General Insurance.

“If the customer opts for a non-network hospital, then the approval for the claim will be as per admissible policy terms and conditions and the same will be utilized as per the available sum insured,” says Deepthy Nandakumar, AVP – Health Claims, Digit General Insurance.

Once you initiate your request to go for surgery at a non-network hospital, the insurance company will negotiate the rate with the hospital. If they fail to reach a consensus, you may have to pay the entire amount from your pocket.

You will have the option to submit the bills and other documents to your insurer and claim the reimbursement amount later.

So, if you want an “assured cashless facility” and don’t want to pay any money from your pocket, a network hospital could be a better option. “Insurers may have a working relationship with network hospitals, ensuring that the cashless facility is more likely to be available. Non-network hospitals may refuse cashless facilities, potentially requiring you to pay upfront and then claim reimbursement later,” says Rudraraju.

Reasons for choosing network hospitals over non-network hospitals for cashless treatment

Here are the reasons why choosing an empanelled hospital may be more suitable for the policyholders, especially until the ecosystem is fully prepared for the “cashless everywhere” facility:

1) Tariff is fixed: “Empanelled hospitals have predetermined tariffs agreed upon with the insurance provider. This eliminates uncertainties and ensures that the charges for medical procedures are within a specified limit. This can result in faster discharge for the customer and better customer satisfaction for the insurance company,” says Bathwal.

2) Streamlined cashless settlement process: “At network hospitals, the cashless settlement process is usually smoother and quicker since there’s an established relationship between the hospital and the insurance provider,” says Suman Pal, Chief Claims Officer, Onsurity.

3) Quality assurance: Empanelled hospitals are vetted by insurance companies for quality standards, reducing the potential risk of unexpected complications or substandard care, says Pal.

4) Lower risk of fraud: “Empanelled hospitals are part of a network with established relationships and agreements. This reduces the likelihood of inflated billing or unnecessary procedures, minimizing the risk of fraud. In contrast, non-network hospitals may not be subject to the same level of scrutiny, potentially leading to higher costs and misuse of insurance coverage,” says Bathwal.

Cashless health insurance: When to go for network hospitals, when to opt for non-network hospitals?

The cashless everywhere initiative gives the freedom to policyholders to choose any hospital based on their preference of treatment facility, physician and location, without having to worry about whether the hospital is empanelled under his or her insurer, says Parthanil Ghosh, President, Retail Business, HDFC ERGO General Insurance Company.

How to decide when to go for network hospitals or non-network hospitals? Rakesh Goyal, Director, Probusinsurance.com says, “It’s generally advisable to opt for empanelled hospitals for cashless treatment whenever possible to minimize financial strain and streamline the claims process. “It is advisable to consult the chosen hospital before hand directly for more details on the cost, in case of planned hospitalization.” adds Ghosh.

In emergency situations, where immediate treatment is necessary and an empaneled hospital is not accessible, opting for cashless treatment at a non-network hospital may be the only viable option. “If a non-network hospital offers specialized treatment or facilities not available at empanelled hospitals, it may be worth considering, provided the out-of-pocket expenses are manageable,” adds Pal.

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