Insurance Company Directed To Pay Claim Of A Woman Who Underwent Surgery In A Non-Network Hospital; What The Law Says

The Madurai Bench of the Madras High Court has ordered an insurance company to pay Rs 1.22 lakh to a Madurai woman who underwent surgery at a non-network hospital, according to recent news reports

Last year Insurance Regulatory and Development Authority of India (Irdai) introduced a cashless everywhere initiative even if the hospital is not under the insurer’s network. Irdai has also mandated that all cashless claims be processed within three hours of receipt or discharge authorization. These were under a series of reforms undertaken by Irdai to enhance policyholders' access to health insurance. 

In this case, the hospital needs to be informed 48 hours before admission in case of planned admission. In case of emergency admissions, the insurer must be informed within 48 hours of hospital admission. 

However, the hospital where the treatment is done should meet the terms and conditions of the policy and fulfill the definition of a ‘hospital’ as laid down in the policy. Also, the final decision to extend the cashless facility to a particular hospital shall rest with the insurer. 

Also, it was recently announced that cashless treatment to road accident victims will be available up to a limit of Rs 1.5 lakh per accident per person starting in March. 

Why A Network Hospital Is Always Preferable 

However, even with such a rule in place, it is always advisable to choose a network hospital for treatment for the following reasons. Since there is already a relationship, the cashless claim would be smoother at a network hospital. 

Also empanelled hospitals are vetted by insurance companies for standards in terms of quality, so that reduces the risk of substandard care. Also, in the case of network hospitals, the insurer negotiates the rates of treatment, so a more more comprehensive rates are available. 

Hence, the chances of an inflation bill or fraud are also reduced. It has also been reported that patients have faced difficulties in availing cashless claims at non-network hospitals. This is mostly due to a discrepancy between the amount received compared to the amount approved. 

So, in case of planned hospitalization, in case there it is not the situation is not that of an emergency, one should choose a network hospital if possible.