Pre-declaring medical rates beneficial for customers

But difficult to implement in the absence of proper grading of hospitals, say insurers

Wouldn't it help if you knew how much your hospitalisation bill would come to before getting admitted? You will know at once whether you can afford treatment in that particular hospital or not. You will also know how much of the treatment cost will be covered under your insurance policy. This can be a reality if insurance companies implement the Bombay High Court’s suggestion that they declare package rates for different ailments and make hospitals fall in line with their rates. The court said this in a hearing earlier this month, in response to a public interest suit which said package rates should be treated as entitlement and need not be dependent on hospital gradation. That is, the court wants insurance companies to offer the same rates for all treatments across hospitals, irrespective of the kind of hospital.

While agreeing the move will help customers, insurance companies say it is difficult to pre-declare package rates and have uniform package rates because of the difference in grades of hospitals. K K  Mishra, chief executive officer (CEO), Tata AIG General Insurance, says: “Ideally, there should be an accrediting body for hospitals by the government. Under Rashtriya Swasthya Bima Yojana (RSBY) the government has declared rates and if it can be done for hospitals participating in RSBY, the same can be done for other hospitals as well.”

While it may be possible to offer pre-declared or packaged rates in the case of planned treatment or surgeries, it could be difficult to do so in case of emergencies, says Amarnath Ananthnarayanan, MD and CEO, of Bharti Axa General Insurance. One solution could be where insurers come out with a basic product offered across hospitals and specify all the conditions under this product. At the same time, they can offer policies whose scope will extend beyond this product, Ananthnarayanan adds. Divya Gandhi, head, general insurance and principal officer at Emkay Insurance Brokers, says hospitals can charge higher rates for room rent, etc. But the basic treatment cost can be the same.

Even now under the preferred network system, hospitals do offer pre-declared rates. But these are not really pre-declared. They are arrived at by the MoU signed between the hospital and the insurance company or third-party associate. But it helps customers since they know roughly how much of the treatment cost they will be able to claim.