Aiming for 100% hospital cashless treatment, the Insurance Regulatory and Development Authority of India (IRDAI) has taken brave steps. The objective of this move is to simplify health insurance claims thereby enabling patients to receive medical attention without making any upfront payments and letting insurers settle bills directly with hospitals. With that being said, the feasibility of 100% cashless hospital treatment in India faces numerous stumbling blocks.

Current State Of Cashless Treatment

The IRDAI’s annual report for 2023 highlights some of the challenges that are faced when it comes to cashless hospital treatment. Despite regulatory efforts, only 42% out of 23.36 million health insurance claims in 2023 were settled through cashless means. This shows how far we still need to go before achieving IRDAI’s goal of cash-free medical treatment by July 2024.

Read More: Medical Treatment Without Bill Payment: The Need For Cashless Everywhere.

Key Reforms And Initiatives

• To put this in place, IRDAI requires all insurers to process every claim through cashless means within three hours after discharge authorisation has been given.

• Additionally, insurance companies must establish separate help desks at hospitals where claims can be processed.

• These measures are intended to speed up the process and make it easier for policyholders but smaller healthcare establishments as well as rural areas will find it challenging if these reforms are enacted.

Obstacles To Implementation

Ashish Jha is highly representative of cases demonstrating the complexities that come along with achieving cashless health insurance claims. He was unable to get a cashless treatment even though he had health insurance because his hospital lacked the facilities required for this purpose.

Such scenarios are common which implies there is a bigger problem than just having no proper infrastructure and therefore lots need investment so that small health centres can be upgraded.

Read More: How To Choose The Right Health Insurance?

“The three-hour claim settlement is only applicable for tie-up hospitals as all hospitals don’t have partnerships with a health insurer,” says Naval Goel, Founder and CEO of PolicyX.com. This means that the IRDAI initiatives 2024 will be most beneficial to urban areas where there are many hospitals and most rural and semi-urban areas will be dominated by reimbursement claims.

Technology And Infrastructure Challenges

Weak operational frameworks cannot prevent abuse and ensure the efficiency necessary to provide smooth cashless treatment. The establishment of a hospital network as well as technology infrastructure upgrading is vital.

Currently, major cities have networks of these facilities needed for cashless claims settlement while it remains quite difficult to extend the same opportunity to non-network hospitals located in rural zones.

The National Health Claims Exchange is a digital platform to be set up jointly by the Union Health Ministry and IRDAI wherein insurance companies, healthcare providers, and government insurance scheme administrators come together.

This system can greatly facilitate the cashless insurance policy claim process by simplifying communication about health claim information.

Policyholder Experience And Transparency

As per Policybazaar’s survey around 70% of those claiming reimbursements had to depend on emergency funds. More specifically, this figure demonstrates why all medical institutions including those located in rural or remote areas must have access to the benefit of cashlessness.

It would take enhancing transparency levels and giving better knowledge when it comes to network hospitals covered procedures plus possible out-of-pocket expenses among other steps to enhance the policyholder experience.

Conclusion

While the IRDAI’s objective to make this cashless medical treatment is commendable and also quite ambitious, making India 100% cashless hospital care requires an approach addressing significant infrastructure, technological as well as administrative hurdles. For countrywide implementation, insurers must partner with hospitals, procedures must be uniform and verification processes must be efficient.

This transformation can be spearheaded by the insurance industry which has had a Compound Annual Growth Rate of 10.3% over the last decade. However, this achievement calls for huge investment and coordination among all players involved. Nonetheless, making sure that every Indian gets under the shield of a cashless claims settlement facility remains a difficult task but it is something worth fighting for.

For more information on the IRDAI's initiatives, visit the official IRDAI website.