<div><em>The IRDAI makes it mandatory for insurers and the TPAs to ensure that every discount received or agreed to be received from the hospital are passed on to the policyholder, explains <strong>Sunil Dhawan</strong></em><br><br>A regulatory move that actually helps consumers in getting a discount is although a rare event but always a welcome move. Health insurance policyholders are set for a sweet surprise as Insurance Regulatory and Development Authority of India (IRDAI) has directed all insurance companies and Third Party Administrators (TPA’s) to ensure that if there are any discounts obtained from the hospitals, they need to be passed on to the policyholders. </div><div> </div><div><strong>The new rule: </strong>Insurance companies and the TPA’s have an agreement with hospitals on the rack rates of treatment cost of all specific ailments. When a hospital raises a bill, there can be a discount offered on the same which goes hidden from the bill. IRDAI has asked insurer and TPA’s to appropriately identify and apportion the discount to the health insurance policy (on cashless or on reimbursement basis). </div><div> </div><div><strong>How discounts work: </strong>The hospital bill will now on reflect the discount being offered, if there is one. Say, the sum insured of a health policy is for Rs 1 lakh and the gross bill amount is Rs 1 lakh i.e. excluding the discount. If there is an agreed discount of 10 percent, the insurer would end up paying (if its cashless payment for policyholder) Rs 90,000 to the hospital. Importantly, see how you as a policyholder gain. Instead of Rs 1 lakh (entire sum insured) being utilized, Rs 10,000 of your coverage remains unused.</div><div> </div><div>In case, the hospital bill is more than the sum insured, IRDAI has asked to initially adjust the amount of discount from the bill amount and then present the same to the insurer or policyholder to pay. Say, in the above case, if bill raised is to the tune of Rs 1.20 lakh. In that case, policyholder would have to pay extra Rs 20,000 from own pocket as sum insured is till Rs1 lakh. However, now discount has to be adjusted and extra payment will be restricted to Rs 10,000.</div><div> </div><div><strong>Gains for policyholder</strong>: As a policyholder, one stands to gain on three counts: One, the sum insured to the extent of the discount remains available for the policyholder for future use, and secondly, in case the bill is exceeding the sum insured, discounting helps in minimizing payout and thirdly, in case it’s a reimbursement case (unlike cashless where insurer pays), you need to pay lesser amount.</div><div> </div><div><strong>End note</strong>: The move is certainly customer friendly and brings out the agreement clauses between insurers, TPA and hospitals out in open for the benefit of policyholders. The IRDAI makes it mandatory for insurers and the TPAs to ensure that every discount received or agreed to be received from the hospital are passed on to the policyholder. The next step could be to make the treatment rate chart along with discount transparent and easily accessible to all. </div><div> </div>
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