Cashless health plan better than reimbursement

This story was first published in the Financial Chronicle on March 15.

Being aware and staying informed about health insurance is as important as having a health insurance policy. The decision you make should be an informed one with all the options on the table. Incidences of individuals being miss-sold and claims getting rejected are plenty.

Over the last half a decade or so, cashless health insurance has taken precedence and has seen encouragement by the government, regulators as well as corporates who offer cashless health plan under a group cover. Not only does a cashless health policy address many pain points a policyholder typically faces at a hospital, but it also employs technology solutions that streamlines the process and makes it more customer-friendly.

Key benefits

No financial trauma: In a cashless policy, the expenditure on healthcare during a stay at the hospital is settled between the hospital and the insurance company (payer). The patient need not shell out large amounts of up front cash at admission or discharge. Depending on the co-payment structure, very little percentage of the claimed amount/ final payment needs to be paid by the patient. In case of emergency situations or unplanned healthcare expenditure, cashless health policy eliminates the financial trauma one would otherwise experience.

Zero paperwork: Cashless transactions save the patient the back-and-forth associated with getting the paperwork right and submitting the claim. A reimbursement policyholder has to ensure that he/she has every single piece of document including bills, proof of tests, test results and prescriptions and submitwithin 30 days of treatment to the insurer — a considerable waiting period between bill payment and reimbursement. In case of a cashless policy, the patient does not need to submit any documentation of treatment to the insurer. The policyholder need only walk in to the hospital with the cashless card, the hospital takes care of the rest.

Electronic transactions from end-to-end: Many hospitals in the urban areas today are using electronic platforms to exchange claims information with the insurance company/TPA. A cashless health policy also mandates the use of electronic exchange of claims because the claim needs to be approved as soon as the patient enters the hospital. Thus, in order to intimate the policy provider that the policyholder is seeking cashless treatment, platforms that enable real time exchange of patient and treatment information will ensure that the process is transparent.

Lower incidences of fraud: Since, the policyholder is not involved in a cashless claims process, and claims are pre-approved, the incidence of fraud is much lower. Electronic platforms lend themselves to a tighter claims exchange process, bound by codes and rules where bills cannot be manipulated.

Maintenance of electronic records: Electronic information makes for structured records where the patient has treatment and policy utility history that is easily accessible. Electronic collation of data can tell researchers a lot about how policies are being utilised, what are the most common illnesses, demographic dissection of illnesses.

Enhanced customer experience: In the end, a reliable and hassle-free claims process will ensure a superior customer experience where the customer does not have to bear a financial burden and handle tedious paperwork, experiences a smooth and transparent claims approval process, and has easy access to medical history in the future.

Cashless health insurance has seen tremendous validation from various state governments and the government at the centre as well. In the last few years, several health schemes introduced and implemented by the government are cashless. For example, Tamil Nadu chief minister’s health insurance scheme for BPL citizens is cashless and completely electronic where patients are given cashless care at hospitals without having to bear the financial burden typical of the same.

(The writer is CEO at Remedinet Technologies)

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