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Demand discount on medical bills under health insurance

As you are aware, Health Insurers or their Third party Administrators (TPAs) tie-up with many hospitals (i.e. Network Providers), where you can avail of cashless treatment under your health insurance plan.

While associating with any hospital, insurance companies and TPAs must ensure that the policyholders receive the best and yet cost effective treatment. This could even include discounts and rebates on treatments.

In this regard, it has been observed that insurers and TPAs may be obtaining discounts from the hospitals during settlement of the claims of the policyholders. Moreover, this discount is not limited to only the Network Providers. Even hospitals not covered under the Network may offer discounts.

Vide its circular Discounts on bills offered by Network Providers, IRDA (Insurance and Regulatory Development Authority of India) has mandated that such discounts, if any, must be passed on to the policyholders making a claim under the health insurance policies held by them.

In fact, where the discounts are agreed upon, based on the total bills raised by a hospital, every insurer or TPA has to suitably identify and apportion the same to individual claimants. This is to ensure that each policyholder or the claimant benefits from any such bulk discounts negotiated by the insurer or TPA.

Accordingly, all insurers and TPAs have to set up a proper procedure, on the lines detailed below.

1. The final hospitalization bill raised by the hospital, pursuant to any medical treatment under any health insurance policy, should also give details of the discount(s) as agreed upon with the insurers or TPAs. This will ensure transparency, whereby the policyholder making any claim would also become aware of the discount, if any.

2. The agreed upon discount would be netted off from the Gross amount raised in the bill. Thus, when the admissible claim amount is in excess of the Sum Insured under the policy, the policyholder's liability to pay the balance amount would be lower to the extent of the discount offered. 

And even when the claim is within the limit, it would leave a higher unutilized balance for the future claims during the year.  

3. Likewise, when the policy has a clause on co-payment or deductible, the insurer or TPA must ascertain that such clause is applied only after reducing the discount offered by the hospital.

4. All discounts and rebates, received by the insurers or TPAs from the hospital, have to be passed on to the policyholder or claimants in monetary terms only.

5. All insurers have to include these procedures in their detailed claim settlement guidelines issued to the TPAs.

6. These guidelines are applicable with immediate effect. Further, they apply on all claims under health insurance policies, whether under cashless facility or via reimbursements.

In short, undoubtedly an immense relief, given the exorbitant medical bills that often accompany any hospitalization or medical treatment.

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