Covid-19 crisis: Policyholders caught in crossfire between hospitals and insurers

Prateek Waghmare, 22, tested positive at the beginning of April. While he was recuperating, his father unfortunately got infected. Soon, the condition of his father started deteriorating and they had to rush him to a hospital located in a town near Indore. While Prateek was a bit relieved on being able to arrange a timely medical intervention, another issue cropped up. The hospital refused to offer him cashless treatment and told him to deposit some advance money for the continuation of the treatment.

“We pushed for the cashless claim but the hospital refused it, even though we were told that it was a network hospital. I don’t know the reason for the refusal as we were not given a clear answer. We were just asked to pay in cash as the hospital refused to accept payment through any digital modes,” he said.

While Prateek’s father is still in ICU and his priority is to get him proper medical treatment, he is not sure whether his claim will be processed once his father gets discharged.

“I hope my my claim is processed quickly when I apply for reimbursement with my insurance company. My agent has said that it might take one month,” he said.

Hassled policyholders

While many policyholders complain their cashless claims are not getting accepted, others protest that hospitals are only accepting cash for the treatment, which they fear may cause a problem later at the time of applying for reimbursement from insurance companies. Prateek’s case echoes with many who are struggling to get proper medical care for their loved ones. Caregivers across the country are taking all possible measures to ensure proper treatment, but many policyholders are left wondering whether their health insurance policy will be able to protect them from being financially hit hard.

Allaying the fears, Sanjay Datta, Chief – Underwriting and Claims at ICICI Lombard General Insurance, said: “At the industry level the average claim size for Covid treatment is Rs 1 lakh, out of which 20-30% generally gets deducted on account of co-payment, room rent and sum insured limit. If there are no such restrictions almost the entire amount gets paid. It differs from insurer to insurer.”

On the issue of how soon can one get the reimbursement amount paid, Girish Rao, chairman and MD of Vidal Health, in an interview, told Money9: “Now, the regulator has approved and instructed all the insurance companies and TPAs to accept claims through electronic medium. So, you could just take on your phone and a lot of insurance administrators have the mobile app. So you can attach your photographs and scanned copies to the app and then send it to the administrator who will process the claims. Typically, these claims are processed within five to seven days.”

High cost of PPEs

Another bone of contention between hospitals and insurance companies has been the high cost of Personal Protective Equipment (PPE). While few insurers say PPE kits have once again become a significant cost of hospital bills, others say the issue has now been settled down.

“The cost of PPE has gone down and the issue has also been settled down. We are paying the reasonable amount for PPE as was decided by General Insurance Council,” said Datta.

Last year in July, when the high cost of PPEs became a cause of concern for many, the General Insurance Council (GIC), an umbrella body of non-life insurers, prepared a rate chart for Covid-19 treatment after taking into account rates published by various state governments. The suggested rates were broadly based on the schedule of rates that were suggested by the Niti Aayog panel. Under the new proposed rates, the partner hospitals can charge between Rs 1,200 and Rs 2,000 for PPE depending upon the severity of the sickness.

As the country reels under the tsunami of Covid cases, policyholders hope for quick claim settlement so that they don’t get the hardest hit financially.