Despite news every now and then that the cashless facility will be started by PSU insurers at corporate hospitals in the four metros, there is hardly any progress in the matter

The three-month-old imbroglio between public sector insurers and hospitals over the cashless facility remains unresolved. Corporate hospitals are still unable to come to an agreement with public insurers over the standardised rate for different procedures.

Segar Sampathkumar, deputy general manager, New India Assurance, says, "We want to negotiate with corporate hospitals on a one-on-one basis because each hospital is different and hence will have different standardised rates. However, the committee of hospitals is keen to negotiate with the insurers, rather than have individual hospitals talk separately."

Sampathkumar said that the company had a meeting with the committee on 8th September and conveyed its position. "They have not got back to us, but we hope to meet again early October and make progress. The cashless imbroglio does not affect our business. We are a 90-year-old company with good credibility. We are trying to correct the system in the interest of policyholder. If there is high charge from hospitals, it will reduce the sum assured for policyholder and may not cover another illness in the same year," he said.

A recent survey found that despite the removal of the cashless feature, corporate hospitals in Mumbai were overcrowded and that there were no beds available for a new patient. The country is suffering from a lack of quality hospitals.

For now, both sides appear to be dillydallying since there has been no major business impact. The Insurance Regulatory Development Authority (IRDA), the regulator also does not seem to be eager to get involved in the issue.

According to industry sources, private insurance companies may join public insurance companies to negotiate rates with corporate hospitals. Private insurance companies have barely been able to keep their neck out of the water till now. They will be watching with interest the outcome of this conflict, to see how it might benefit them. Most private insurers are far from breakeven themselves. Addressing an event in Mumbai recently, Bajaj Allianz's chief executive Hemant Kaul said that the industry is not making money on mediclaim.

According to M Ramadoss, chairman and managing director, New India Assurance Co Ltd, "Insurance companies have been witnessing inflated, fraudulent, and unwarranted claims by some hospitals, when the patient had declared that he/she had insurance cover and chosed to go for cashless treatment. This is why insurer-funded healthcare cost turns out to be more than the individual-funded cost. We are trying to get as many hospitals on the Preferred Provider Network (PPN). The rates could vary from hospital to hospital, based on the location, facilities, equipment, etc. It is not as if one-size-fits-all. If there is an industry standard for standard rates, we will welcome it. Due to the absence of it, I have to step in, but not to rob hospitals of their profits. We are trying to benchmark average costs of the previous two-three years and using recommendations of doctors on panels to come up with frozen standard rates for procedures and treatments."

In August, the Delhi High Court had asked insurance regulator IRDA to make some arrangement to provide cashless facilities to policyholders in the wake of the dispute between insurance companies and city hospitals, because of which medical policyholders were inconvenienced. "The Insurance Regulatory and Development Authority (IRDA) should, as a regulator of the insurance industry, intervene and ensure that such changes do not affect existing policyholders...," Justice S Muralidhar said.

"You (IRDA) cannot leave patients suffering, saying that a meeting will be convened. Patients are not getting treatment because of the dispute between insurance companies and hospitals. It is your duty to act timely." The court also took strong exception to the remark by the IRDA chairperson, published in a newspaper, that it was a matter between insurance companies and hospitals and that there was no regulatory issue involved. IRDA has till date managed to evade its responsibility in the matter.