An increasing number of hospitals and nursing homes across the four metros are accepting the stringent terms set by the four public sector general insurance companies -- New India, Oriental, United and National.

Talks are on between the insurers and hospitals who have refused to toe the line so far, said people close to the development.

According to the list of hospitals drawn up by insurers, there are around 90 hospitals in Mumbai, 110 in New Delhi, 55 in Chennai and 60 in Bangalore that will offer cashless services to the customers of the four PSU general insurers.

Some of the big hospitals that are now part of the list include Fortis Hospitals, Godrej Memorial and Kohinoor Hospital (in Mumbai), Genesis, Holy Angels Hospitals and Fortis (in New Delhi), MS Ramaiah Hospital, Mallya Hospital and Manipal (in Bangalore), and Apollo Hospital, Hindu Mission Hospital and Dr Agarwal’s eye clinic (in Chennai).

On July 5, Financial Chronicle had first reported that the public sector non-life insurers had capped the treatment cost for most common surgeries in case of retail policyholders, effective July 1. The companies had asked their third party administrators to entertain reimbursement claims for these cashless surgeries only from hospitals and nursing homes that have agreed to the capped rates.

M Ramadoss, chairman and managing director of New India Assurance Company, told Financial Chronicle that the four companies have come together and decided to have a preferred network of hospitals in the four metros.

"As we speak, more number of hospitals will be added in the network as and when they agree to the package that we have set for 41 different treatments,” said Ramadoss.

According to a senior official at United India Assurance, against 350-400 hospitals offering cashless services for the four PSU earlier in Mumbai, only 90 have agreed so far. “We expect more number of hospitals to come on board by the end of September,” the official said.

The number of hospitals offering cashless services in New Delhi has gone down from 400 to 110, from 300 in Chennai to 55 and from 250-300 in Bangalore to 60.

Other than the preferred network of hospitals, if a patient gets herself treated in any other hospital, the patient has to settle the bill and get the money reimbursed.

Public sector companies command around 70 per cent of the market share in the health insurance business and hence, many hospitals that have a higher traffic of patients because of their tie up with such insurers.

“The hospitals will lose patients who want cashless service and hence they will slowly fall in line,” United India official added.

The PSU insurers have begun work on grading of hospitals based on the number of beds and the facilities they provide.

“The rates will be fixed based on which category of hospital it is,” Ramadoss said. According to him, the hospitals with bigger better infrastructure will be able to attract better rates than a poorly maintained small hospital.