Hospitals claim they are financing cashless service

 Hospitals claim they are financing the cashless hospitalisation service in the country as payment delays from third party administrators (TPAs) well exceed 30 days in many instances.

 The shoe is now on the other foot as hospitals need to recover their dues from TPAs well after discharging patients, the healthcare institutes have suggested the imposition of a penalty on TPAs in the event of payment delay beyond 30 days.

 TPAs are licensed by insurance companies to act as an intermediary between the insurer and the hospital.

 With their involvement, the four state insurers have been able to introduce cashless hospitalisation to policyholders, who otherwise had to wait in queue for reimbursement from the insurance companies. It is now the turn of hospitals to be waiting for reimbursement from insurers via the TPAs.

 The Association of Medical Consultants and the Hospital Association of Bombay have complained to the state insurers of their precarious stand.

 The MoU signed between TPAs and hospitals allows for payment to be made within a span of 15 days.

 While most hospitals do not mind payments made within 30 days, complaints sent to the four state-owned insurance companies point to delays well beyond 45 days.

 While TPAs have a bank guarantee with the insurance company concerned, such a "letter of comfort in terms of payment is not there between hospitals and TPAs," said a senior administrative officer at a Mumbai-based hospital.

 Senior insurance officials admitted that TPAs have huge outstanding positions at a number of hospitals. "In the new order of things as the market expands, dues to hospitals could run into crore within a span of a month," they added.

 Some hospitals are asking for a security deposit from TPAs. However, TPA officials pointed out that with a limited capital base of just Rs 1 crore, this is not a feasible solution.

 The hospital problem rests with the fact that doctors are usually paid upfront, often on a daily basis, said a senior hospital personnel.

 "Today he has to wait since the hospital has not received funds from the TPA concerned, which, in turn, is waiting to be paid by the insurance company," he added.