Health insurance: Nationwide Unified Cashless Network and Fully Cashless System Set to Launch in Health Insurance
Introduction
The Insurance Regulatory and Development Authority of India (IRDAI) is working with industry stakeholders to introduce two significant changes to health insurance policies in India. According to a report by The Economic Times, these changes include the establishment of a unified network of hospitals for all health insurance policies offered by any health or general insurance provider nationwide and the implementation of a fully cashless settlement system that covers all expenses.
Current Scenario
Currently, the cashless settlement services are available in only 49% of hospitals in India. This is due to general and health insurance providers frequently updating their list of network hospitals to avoid fraudulent claims or costly medical bills maximizing payouts from insurers. Hence, to address these challenges, IRDAI is working with the General Insurance Council (GIC) to create a nationwide, industry-wide common cashless hospital network.
Standardised Approach
The report cited industry insiders that the GIC has already created a committee to establish a shared hospital empanelment system. The committee is also working to devise a standardized onboarding rate for hospitals by insurers. Currently, different hospitals and insurance companies have separate agreements with varying rates, which may add complexity to the process.
Cashless Health Insurance Claim Settlement System
Apart from the unified cashless network accessible to all insurance providers, the regulatory authority is preparing to introduce a 100% cashless health insurance claim settlement system. With frequent negative claim experiences in health insurance, potential policyholders may question the reliability of such policies. Significant enhancements in this aspect can help rebuild policyholders’ trust and confidence. Additionally, this will enable equal access to hospitals, regardless of the insurance provider, fostering greater trust and increasing the adoption of insurance throughout the country.
Future Implementation
According to Parthanil Ghosh, President-Retail Business, HDFC ERGO General Insurance, the initial phase is progressing smoothly. As the details are being finalized by the Council, it is highly probable that these enhancements will be launched by January 1, 2024.
The benefits of the unified cashless network and fully cashless settlement system
- Accessibility: The unified network of hospitals accessible to all health insurance policies offered by any health or general insurance provider nationwide will ensure equal access to hospitals, regardless of the insurance provider. This will foster greater trust and confidence among policyholders and increase the adoption of insurance throughout the country.
- Simplified Process: The industry-wide common cashless hospital network will streamline the health insurance claims settlement process. It will eliminate the need for policyholders to pay hospital bills upfront and wait for reimbursement, reducing the financial burden and stress on patients and their family members.
- Standardized Rates: The standardized onboarding rate for hospitals by insurers will simplify the hospital empanelment process. It will reduce the complexity of different hospitals and insurance companies having separate agreements with varying rates.
- Quicker claim settlement: The fully cashless settlement system will reduce the time taken to settle health insurance claims. This will be achieved by eliminating claims processing, reducing the paperwork and reducing the overall time required to reimburse policyholders.
Impact of the unified cashless network and fully cashless settlement system
- Reducing fraudulent claims: The unified cashless network and fully cashless settlement system will reduce the number of fraudulent claims in the health insurance industry. This is because a cashless network will enable health insurance providers to keep track of claims and expenses, leading to better fraud prevention.
- Increasing public trust in insurance: The implementation of these systems will rebuild policyholders’ trust and confidence in health insurance policies. This will encourage more people to invest in health insurance, improving the overall health and well-being of the country.
- Affordability: With the implementation of a fully cashless settlement system, out-of-pocket expenses for policyholders will reduce significantly, making health insurance more affordable for individuals.
- Increased Competition: The unified cashless network and fully cashless settlement system can force insurance providers to improve their services continually, which will increase the competition within the industry. This will lead to a better quality of service and more options for policyholders.
Conclusion
The introduction of the unified cashless network and fully cashless settlement system is a significant step towards making health insurance more accessible and reliable in India. With these improvements, policyholders will benefit from a simplified claims settlement process, reduced out-of-pocket expenses and a higher standard of service across the health insurance industry.
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