Cashless Anywhere: A Game Changer or a Pandora's Box?

The General Insurance Council of India has embarked on a transformative journey with the launch of its groundbreaking 'Cashless Anywhere' initiative. This pioneering move allowing policyholders to access cashless healthcare even at hospitals outside their insurer's network. While hailed as a game-changer for patient experience, its impact on the healthcare landscape is still unfolding. While hailed as a game-changer for patient access and convenience, the initiative's long-term impact remains a subject of intense debate. Let's unravel the potential benefits and challenges to understand the true picture.

At its core, the 'Cashless Anywhere' initiative seeks to eliminate the cumbersome process of cash transactions during insurance claims, offering policyholders unparalleled convenience and peace of mind. By leveraging digital platforms and cutting-edge technology, the initiative empowers individuals to avail cashless services anywhere, anytime, with just a few taps on their smartphones.

This initiative offers undeniable advantages as policyholders will no longer be confined to network hospitals, patients can now choose the facility that best suits their needs, especially in geographically remote areas or for specialized treatments. This increased access to care can be life-saving in critical situations, eliminating the financial burden and agonizing wait for claim reimbursements. Additionally, the streamlined cashless process removes the stress of upfront payments and cumbersome paperwork, allowing patients to focus on their recovery.

According to industry data, only 63 percent of health insurance customers avail of cashless facilities when they get treated at hospitals. There is no reason why the remaining 37 percent should pay cash up front and claim reimbursement later. This is partly due to lack of awareness or the absence of cashless agreements between the hospitals of their choice and their insurers. ‘Cashless everywhere’ is a customer-friendly move that the insurers have come together to offer their customers.

For millions, especially in remote areas, it removes the financial barrier to seeking crucial medical attention. They will not be relied on out-of-pocket payments or cumbersome reimbursement claims. Choosing hospitals based on expertise, not network constraints, empowers patients and improves their chances of receiving optimal treatment. Cashless treatment alleviates the burden of upfront payments during a vulnerable time.

Freedom to choose any hospital empowers patients to prioritize expertise and comfort, potentially leading to better outcomes which will encourage more people to opt for health insurance strengthening the overall healthcare ecosystem.Increased competition among hospitals due to expanded network access could lead to more competitive pricing in the long run.

It also offers few benefits specific to the corporate world through Group Health Insurance to their employees such as 1. Access to broader healthcare options can be a powerful retention tool, boosting employee morale and loyalty which will enhance employee satisfaction. 2. Streamlined cashless claims across all hospitals simplify paperwork and minimize administrative hassles which will save on time. 3. Choosing specialists based on expertise, not network limitations, empowers employees and improves treatment outcomes. 4. Eliminating upfront payments during medical emergencies brings peace of mind and financial security. 5. Easier access to quality healthcare can lead to a healthier, happier, and more productive workforce.

While the initiative empowers patients, its impact on hospitals is more nuanced. Small and non-network hospitals, previously excluded from the cashless ecosystem, now have the potential to attract a wider patient base. However, concerns regarding timely claim settlements and reimbursement amounts remain. The GIC guidelines stipulate a 48-hour pre-intimation for elective procedures, and in emergencies, patient need to intimate to hospitals within 48 hours from hospitalization seeking cashless. But The Challenges remains that what if insurer and hospitals do not reach consensus within 48 hours. This needs to be taken care of and shall be well explained to customers otherwise the whole objective of this initiative will be tossed.

The hospital who satisfy the criteria as per policy, will have to send a cashless pre-authorisation request to the insurance company, which will then initiate the cashless activation process and in case the claim is admissible, hospitals will be asked to submit a one-page agreement, a memorandum of understanding (MoU). Once this step is taken care of, the cashless authorisation will be given even if the hospital is not part of the insurance company’s network.

Even hospitals at remote locations with minimal access to technology can easily avail of this facility. All they need to do is send an email with a request for cashless authorization to the insurance company. In future, it is possible that such requests will be accepted even over other modes of communications, say, Whatsapp. But at the moment, email is the mode that is preferred by insurers.(source-Money Control)

There is another discussion going on that if this initiative will bring the cost of insurer down resulting in reduction of premiums too. Hari Radhakrishnan in his article emphasizes that “The burning issue at hand for insurers is not cashless everywhere, but how to control the ever rising medical costs. GI Council should be focusing on creating a common hospital empanellment framework on behalf of all insurers and TPA’s. The cashless facility should be limited to only the commonly empanelled hospitals. This can be used as a lever to bargain collectively and get a grip on the hospitals profiteering from health insurance claims. Otherwise, the medical inflation will drive costs up and health insurance will become unaffordable.” The cost of health insurance depends on a lot of other variables as well. For example, rising healthcare inflation, change in individual policyholders’ choice of hospital or rooms and so on. It may not be possible to isolate this measure to find out if it has had a direct impact on claim costs. However, the expansion of the cashless facility and the adoption of cashless insurance as the default mode of settlement would result in long-term benefits for both parties.

Challenges:

Misuse potential: Employees seeking treatment at expensive hospitals could raise costs for the group policy. The initiative could be misused by patients seeking unnecessary treatment at expensive hospitals, impacting insurers' financial stability. 

Implementation complexities: Managing claims from diverse healthcare providers across networks requires robust systems and processes.The diverse healthcare landscape across India raises concerns about quality control and standardized billing practices.The inclusion of non-network hospitals raises concerns about treatment quality and potential for fraud. Building robust quality control mechanisms and expanding the network of qualified hospitals are crucial.

The expansion of cashless claims beyond the network introduces new vulnerabilities to fraud. Unscrupulous hospitals may inflate bills or perform unnecessary procedures to exploit the system. The GIC needs to implement robust monitoring mechanisms and fraud detection strategies to safeguard both insurers and policyholders. Additionally, the initiative raises regulatory challenges. Differing state regulations and hospital accreditation standards could create implementation hurdles, requiring clear guidelines and streamlined processes for nationwide adoption.

Sustainability and cost concerns: Insurers worry about increased claim settlements, potentially raising premiums and impacting their bottom lines. The initiative's long-term financial viability remains a question mark.

Information asymmetry and administrative burden: The process needs clear communication and streamlined procedures to avoid confusion and delays for policyholders and hospitals alike. A recent report from The Hindu clearly highlight that on the ground, this initiative’s uptake is very slow and marred by low consumer awareness about cashless hospital facilities, no standardization of rates for treatment and medical procedures in hospitals across India, and the inability of medical institutes to quickly implement the new initiative. When hospitals and insurers fail to agree on treatment costs, cashless services cannot be offered and no single hospital has the same rates, the tariffs under the scheme are still being worked out by the GIC which is a huge challenge in front of insurers and GIC alike. In an advisory to its members, The Indian Medical Association’s Hospital Board of India (IMA-HBI) said that the scheme has been launched without sufficient clarity on the process. It also warned its members that the sustainability of a hospital will be at stake if it accepts the scheme in its current format.(Source- The Hindu)

Some hospitals allege that in certain cases, insurers delay payments and this will be a major apprehension where a non network hospitals will provide cashless as although MoU will be signed between them with undertaking but hospitals experience will pave the way for success of “Cashless Anywhere” scheme in long run.

By and large, insurers honour their commitments. They have to, as it is mandated by the regulator. Once the authorization is given, payments are usually released on time but these will remain point of discussion while implementing this initiative for future success.

If cashless payment becomes the default option, more and more customers will take this route. Insurers will get information about the hospital, location, infrastructure, facilities available and so on. They will be able to engage better with these hospitals. The availability of granular details under the cashless mode will help reduce frauds. This may not be possible through the reimbursement route, as there is no  direct involvement of the hospital. If payments are released directly to hospitals, we hope we can considerably reduce fraudulent claims.

The road ahead:

The success of "Cashless Anywhere" hinges on effective implementation and collaboration between stakeholders with proper awareness:

Standardizing protocols and ensuring transparency in billing and claim processes is crucial with awareness by Regulators has important role to play and insurers as well as GIC are engaging their audience through multiple sessions on this important topic to raise awareness.

Investing in robust technology and training personnel to handle claims efficiently is key for insurers and they shall ensure to implement proper mechanism to ensure that claim experience shall not hinder which will be crucial for success. Also, need to ensure that the hospital onboarding process shall be quick enough to ensure hassle free experience to policyholders.

Hospitals will need to Maintain quality standards and adhering to transparent billing practices is essential for building trust and also need to share complete details to insurers while submitting the claims to experience faster claim process which will in turn encourage them to opt for more such faster earning opportunities.

'Cashless Everywhere' holds immense promise for improving healthcare access and affordability in India. However, its success hinges on a balanced approach that addresses the concerns of all stakeholders. Strengthening regulatory oversight, ensuring timely claim settlements, and fostering transparency in pricing are crucial steps. Furthermore, collaboration between the GIC, insurance companies, and hospitals is essential to establish clear guidelines and address operational challenges.

To conclude with this initiative might be a step forward towards healthcare accessible to all but definitely affordable healthcare for all shall be utmost objective for all the parties but that's distant dream as of now major chunk of population.