The Big Fight: Hospitals accused insurers of paying old treatment rates

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The Big Fight: Hospitals accused insurers of paying old treatment rates

The Big Fight: Hospitals accused insurers of paying old treatment rates

Hospitals have accused the health insurers of behavior like Cartel by fixing the old treatment tariff. The dispute threatens the existence of small and medium hospitals and can compromise affordable patient care across India.

The forum has written to the Insurance Regulatory and Development Authority of India (IRDAI), alleging insurers of acting like a cartel.
The forum has written to India’s Insurance Regulatory and Development Authority, alleging that of acting like a cartel. (Photo: Liberal AI)

Hospital and health insurer are in Loggerheads. After the General Insurance Council (GIC), the umbrella bodies of all the insurers criticized hospitals to suspend cashless services to some policyholders, Delhi Medical Association Nursing Home Forum (DMA NHF) has now directly complained to the insurance regulator.

The forum has written to the Insurance Regulatory and Development Authority of India (IRDAI), alleging insurers of acting like a cartel.

They have asked the regulator to step, investigate and ensure that hospitals are paid proper treatment fees that match today’s costs. He has also asked the Serious Fraud Investigation Office (SFIO) to investigate whether the behavior of the insurer is against the public interest.

According to DMA NHF, the insurers have created something called “Common Empanese”.

In simple words, this means that all insurance companies come together and decide prices they will pay for hospitals for various treatments. Once fixed, each hospital will have to accept these prices if they want to provide cashless treatment to patients.

The problem is that these fixed rates are extremely old, in many cases have not been modified for 15–20 years, and today actual expenses do not match hospitals.

“Hospital costs, such as rent, salaries, medicines and equipment of employees, are growing rapidly, with inflation of up to 40% in recent years. However, insurance companies are working together through the General Insurance Council (GIC), forcing hospitals to work in old, artificially low tariffs,” Dr. VK Monga, President of Deli Medical Association.

This means that small and medium private hospitals, which cannot absorb these damage, are under great financial pressure in which they can be large corporate hospitals.

Inequality between small and large hospitals

To show how unfair it is, Dr. Monga explains: “A gall bladder surgery can be reimbursed in small DMA-conferred hospitals for just Rs 35,000, while the same surgery costs more than Rs 1 lakh in large corporate hospitals. Such inequality struggles to survive a small hospital.”

In other words, insurers pay little to small and medium hospitals, even if their cost is also increasing.

How does it affect patients?

Dr. Monga has warned that the effect is not only on hospitals but also on patients.

“It also has a direct effect on patients. In some cases, insurers question the need for admission, stay in the hospital (for example, from 4 days to 2 days), which compromises the patient’s care. While the hospital and the patients take up the brunt, “Dr. Monga says.

This means that insurers cut the hospital payment and reduce the patient’s stay, yet they are keeping a large part of the money paying people as a premium.

What can happen if it continues?

Dr. Monga warned that many small and medium hospitals will not survive if these practices continue.

If they are closed, patients will be left with less options for cheap care, as only large, expensive corporate hospitals will remain.

DMA NHF has also reported that India is already one of the lowest hospital tariffs in the world. People from poor countries often come here for cheap high end care.

If the tariff is forced even further, hospitals will not have money to modernize or improve, which will make healthcare unstable in the long run.

The Association of Healthcare Providers (AHPI), which represents many hospitals, said that he had no choice but to stop cashless services for some insurers, such as Bajaj Elians General Insurance and Care Health Insurance, as the cost of treatment was not revised over years.

“Medical inflation in India remains within 7-8 percent range every year, operated by the cost of growing employees, drugs, consumables, utilities and overheads. While hospitals try to increase efficiency, it is not viable to operate at chronic reimbursement rates, continuing for very few people.

– Ends

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