Thousands of health policyholders of Bajaj Allianz General Insurance and Care Health Insurance may lose access to cashless hospitalisation from September 1, following the Association of Healthcare Providers (India) (AHPI)’s decision to suspend the service.
The General Insurance Council (GI Council), the apex body representing insurers, criticised AHPI’s move against Bajaj Allianz and Care Health Insurance, calling it a sudden and unilateral action that has caused widespread confusion and concern among citizens. “Instead of enabling dialogue and resolution, a press statement was abruptly issued, prejudicing the interests of policyholders across the country,” the Council said, warning that such actions risk undermining public trust in the health insurance ecosystem.
AHPI’s move comes at a time when the insurance regulator, IRDAI, is pushing for 100 per cent cashless treatment nationwide. However, while insurers are tightly regulated by IRDAI, hospitals operate without any regulatory oversight, leaving IRDAI powerless to rein in their actions. Over the past three years, healthcare costs have skyrocketed, with hospitals relentlessly hiking treatment charges across the board, pushing quality medical care out of reach for a large section of the population.
The GI Council said that any action which disrupts cashless access ultimately harms the citizens. “Disruption in cashless service not just directly impacts families through higher upfront spends on treatments and out-of-pocket expenses, it also threatens survival of patients in critical medical conditions requiring immediate medical attention,” it said.
“Such action on the part of AHPI undermines the sanctity of a human life, especially in cases requiring emergency hospitalisation, where a policyholder should not be denied cashless treatment and be forced to make financial arrangements,” GI Council said. It’s a combined responsibility of the entire healthcare ecosystem to protect lives and ensure that health insurance remains a reliable and affordable safety net for every Indian citizen, it said.
AHPI apparently decided to stop cashless service due to non-revision of various treatment costs. “Medical inflation in India remains in the 7-8 per cent range every year, driven by rising staff costs, medicines, consumables, utilities, and overheads. While hospitals strive to enhance efficiency, it is not viable to operate at outdated reimbursement rates, much less lower ones. Continuing under such terms risks compromising patient care, which AHPI and its members cannot allow,” AHPI said in a press statement.
IRDAI had asked insurance companies to go for cashless settlement of health insurance claims from August 1, 2024, making hospital bill settlement of policyholders smoother and faster. It said necessary systems and procedures should be put in place by the insurer immediately and not later than July 31, 2024. Every insurer should strive to achieve 100 per cent cashless claim settlement in a time bound manner, the IRDAI said. The insurers should endeavour to ensure that the instances of claims being settled through reimbursement are at bare minimum and only in exceptional circumstances, it said.
“As an industry, we stand united: when an insurer is unfairly targeted, the issue is very serious as it adversely affects the interests of crores of citizens who depend on health insurance for financial protection and access to healthcare,” GI Council said. “More importantly, our solidarity is with the people of India. Patients and families must never be put to such a level of uncertainty and hardships for such reasons,” it said.
GI Council has urged the Association of Healthcare Providers to immediately withdraw its advisory to suspend cashless services. It called on AHPI to encourage its member hospitals to engage in constructive dialogue with insurers and continue offering cashless facilities to all health insurance policyholders.
AHPI, however, alleged that Bajaj Allianz has consistently rejected its proposal to revise hospital tariffs every two years in line with medical inflation, while also demanding tariff reductions. In addition, AHPI alleged its member hospitals have raised concerns about delays in claim settlements and prolonged discharge approvals by Bajaj Allianz General Insurance.
