IRDA asks Insurers not to delay COVID19 settlements

Insurance Regulatory and Development Authority of India (IRDAI) asked insurers to ensure expeditious settlement of claims on cashless basis and requested all the hospitals not to differentiate the patients in terms of admission or treatment.Finance Minister Nirmala Sitharaman on Thursday had asked the insurance regulator to act immediately to address the complaints of denial of cashless claims by insurance companies.She had also informed that more than 9 lakh Covid related claims for Rs 8,642 crore have been settled by insurance companies as on April 20, 2021.

Regulator IRDAI on Friday said that there are reports of certain network providers (hospitals) charging high rates and insisting on cash payments from the policyholders for providing treatment to COVID-19 infected patients though they have cashless arrangement with insurers.It made it clear via a circular that in compliance with the provisions, the insurers in case of cashless claim under a health insurance policy, are advised to ensure expeditious settlement of such claims on cashless basis in accordance with the Service Level Agreements (SLAs) entered with hospitals.In a separate statement, IRDAI also said charging differential rates to policyholders, demanding advance deposits, and denying cashless treatment to policyholders of health insurance policies is not only detrimental to the interest of policyholders but may also, violative of the service level agreement between the service provider hospitals and the insurance companies.

Thus, the insurers have been asked to ensure that the policyholders are charged as per the rates agreed to by network providers wherever applicable. The insurers have to ensure that hospitals do not levy any additional charges for the same treatment other than those rates that are agreed with them.It requested all hospitals not to differentiate the patients in terms of admission or treatment whether they are insured or not insured or whether they pay cash or avail of cashless facility.A gesture of this nature is needed on the part of hospitals in these difficult times to re-enforce the confidence of the public in the healthcare system including health insurance and build trust.

IRDAI said network provider hospitals are requested to be up to snuff and to provide cashless treatment to policyholders for all treatments covered by the insurance policy including COVID-19, in this difficult time of a second wave of COVID-19 pandemic.IRDAI’s circular requires to put in place an effective communication channel with all the network providers for prompt resolution of grievances of policyholders and all insurers have been directed to ensure that the reimbursement claims under a health insurance policy should be settled expeditiously.

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Krishna Rath is a SEBI Registered Investment Adviser, and since 2015 has been educating netizens on investments and insurance. Krishna is a fee only SEBI RIA and is Odisha's first SEBI RIA. With background in IT, Krishna is changing the advisory space with new innovations in AdvisoryTech.

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