Cashless Everywhere Isn’t Really Everywhere: Hidden Gaps In The New Health Insurance Promise

Earlier, you could only get cashless treatment at a hospital that had a formal tie-up with your insurer. That meant patients often had to check a list before admission, and in emergencies, families scrambled to find a “network hospital.” With “Cashless Everywhere,” that restriction is being removed.

“Now, policyholders can avail cashless treatment at almost any hospital that is willing to work with the insurer for claim settlement. In practical terms, this widens the choices—especially in Tier-2 and Tier-3 cities where earlier the network was patchy,” says Sarita Joshi, head of health and life insurance, Probus.

The process is still the same—pre-authorization from the insurer before treatment—but the coverage is much broader.

Some Hospitals Still Not Included Due To Fraud And Blacklisting.

However, cashless everywhere is not an obligation on the insurance company. This facility is extended, provided the requirements for cashless empanelment are satisfied by the hospitals. 

“If the hospital is already blacklisted by the insurance company for malpractices such as inflated bills, unnecessary or needlessly prolonged hospitalisation, ghost admissions, or other types of fraud, there is no cashless possible. In that sense, the cashless everywhere is a misnomer,” says Hari Radhakrishnan, expert, Insurance Brokers Association of India (IBAI).

Hospitals Must Provide Cost Estimates Before Treatment

Insurers have established mechanisms to efficiently process the pre-authorization of services within hours to help patients avoid large deposit payments. Likewise, hospitals are likewise expected to give treatment estimates prior to treatment to limit surprises. However, problems may still arise from issues involving extra billing for items not covered or costs above standard rates, or other issues. 

“Keeping the policy details up to date, obtaining written pre-authorizations, and asking in advance as to what items are not covered offer the best protection against surprises to the policyholder at the time of discharge,” says Joshi.

In relation to costs, the effect on premiums will depend on how the entire system plays out. Some are wary of higher claim outgo for insurers at first, while others believe a cashless network will reduce overall expenditures. One thing is certain: cashless everywhere will reduce the stress of navigating reimbursement claims and provide greater transparency into hospital billing.

Insurers Must Ensure Fair Pricing And Timely Payments To Hospitals

“For the customer, utility comes back to peace of mind in the national health system knowing there is no need to arrange for a large sum of money on short notice when they are unwell,” says Joshi. 

Properly administered, the cashless everywhere can bring down costs as the MoU rates agreed between the insurers and the hospitals are lower than the rack rates of the hospitals. However, it depends on the efficiency of implementation and hospitals' willingness to charge MOU rates.

“The insurers should also not force predatory pricing on the hospitals by applying artificially lower MOU rates that do not allow hospitals to make reasonable profits on admissions. Further, the insurers and their TPAs should clear their dues promptly so that the hospitals don’t suffer cash flow issues,” says Radhakrishnan.