The Insurance Regulatory and Development Authority (Irda) has asked all insurers to continue to provide cashless facility to patients who are undergoing treatment at hospitals that are not part of the preferred provider network (PPN).

It is the first time the regulator is intervening in the raging issue over the withdrawal of cashless facility by four public sector general insurers at non-PPN hospitals more than two months ago. The move, a senior Irda official said, follows the Delhi High Court directive asking the regulator to step in and bring some order.

“The customers already undergoing treatment at a non-PPN hospital should be allowed to do so,” the official said. “We wanted to give both parties (insurers and hospitals) enough time to carry out negotiations and arrive at a solution as we cannot force any of them being a regulator,” he said.

Senior Irda officials said the notification issued on Wednesday was aimed at bringing clarity.

“Where a policyholder has been issued a pre-authorisation for the conduct of a given procedure in a given hospital or if the policyholder is already undergoing such treatment at a hospital, and such hospital is proposed to be removed from the list of PPN, then the insurers are directed to continue to provide the benefits of cashless facility for such policyholder as if such hospital continues to be in the PPN list,” the notification said.

“In order to ensure that the interests of the policyholders are not adversely affected, at times when a change in PPN is effected, the insurers are directed to inform the policyholders at all times, the nearest possible alternative hospitals where the cashless facility is available and the conditions thereof,” Irda said in its notification.

From April 1, four public sector general insurance companies, commanding around 45 per cent of the market share, withdrew cashless services at all hospitals and migrated to a PPN network. According to the insurers, fraudulent claims by hospitals and the inability of third party administrators (TPAs) to monitor the huge outgo of claims forced them to move to a PPN system.

Hospitals that are currently empanelled are the ones that have agreed to the charges set by the general insurers for 42 common treatments. According to a senior official from New India Assurance, almost all hospitals have agreed to come on board apart from a few big ones like Apollo Hospitals and Max Hospitals.

Irda has mandated all insurance companies to follow the notification under Section 14(1) of the Irda Act, 1999. “If any of the companies fail to give such facilities to customers, they will be penalised,” the Irda official said.

snehashah@mydigitalfc.com