Chennai: Medical inflation has been growing at 10-20% year-over-year, impacting patients, dependent family members and insurance companies. While hospitals have been steadily increasing their charges, insurers have not.

The main problem, rue insurers like New India Assurance say is that the insurance industry has a strong regulator and a stringent legal framework in place, while the medical industry does not. “It would be unfair to charge our customers 4X amount just because hospitals keep increasing their pricing every year. Medical inflation has been a problem and we have been pushing as an industry for more oversight and better regulation of hospitals,” said G Srinivasan, CMD, New India Assurance.

Insurance companies and TPAs at times have blacklisted hospitals for inflation of bills and intentional fraud. “The problem is when hospitals engage in soft fraud — inflating bills — we can send them a show cause notice. Sometimes for more serious offences or violations we do register an FIR with the police. But that is the extent of what we can do,” said Abhijeet Ghosh, head, health insurance, Bajaj Allianz General Insurance. “We could blacklist them and not offer cashless facility. But if a customer chooses to go to those very same hospitals and file for reimbursement, we cannot deny the claim,” Another worrisome trend for insurers has been the government’s decision to cap the price of stents. After stent prices were capped, hospitals have apparently been making up for their losses on stents by increasing room rent, surgeon’s fee and other costs.

“Now there are bodies like the National Accreditation Board of Hospitals (NABH), but they are more concerned about patient care, safety and documentation. There is no regulation on the pricing. How much should the average room rent cost a city hospital? What should be the cost of a surgical procedure? The average surgeon's fees? Nothing is regulated,” said Ghosh.

For the Tamil Nadu Chief’s Minister Comprehensive Health Insurance Scheme, complaints or a spike in surgeries or costs is observed in certain hospitals if followed up by an investigation. “Our fraud detection wing has retired police officers, who talk to patients and find out if the hospital has been inflating bills. If there is evidence to show the same, we fine them 5X the amount they overcharged. It has to some extent served as a deterrant,” said Dr T S Selvavinayagam., additional director of Public Health and Preventive Medicine, Government of TN.

At the industry level, insurers hope that with the formation of the central data repository by the General Insurance Council of India (GIC), they will be able to share data on hospitals. “We will be able to see if hospitals are trying to short change customers. Sometimes within the same chain/group of hospitals, they charge different rates. The charges also vary greatly. In some hospitals, an appendicitis operation would cost Rs 15,000, but in others it could go up to Rs 1.8 lakh. So it is a huge concern and hopefully with better data, we will be able to combat it,” said a GIC official.

“Hospitals are at times fleecing customers. And we strongly feel charges should not be left to the sole discretion of the hospitals,” he added.



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