Health insurance companies are well aware that private medical set-ups tend to charge more from patients with health insurance cover rather than those without it. This naturally translates to losses for insurance providers. In order to ensure profitability and avoid incurring unnecessary losses, health insurance providers tie up with certain hospitals, making them a part of their ‘network’.
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Taking into consideration which hospital maximum number of policyholders go to in specific areas, insurance companies negotiate treatment and stay costs with these select network hospitals to prevent their expenses from spiraling.
These chosen network hospitals become a part of the broad hospital network that specific insurance companies are associated with. All other hospitals outside this mutual network are referred to as non-network hospitals.
The following examples will offer a better understanding of the major difference between getting admitted in a network hospital and a non-network hospital, and how it can impact health insurance claims:
‘A’holds a health insurance policy without the cashless benefit. Upon facing a health issue, he gets admitted into a network hospital. Here, ‘A’ gets full medical treatment as per his needs, however, the bills at that moment will have to be borne by him, out-of-pocket. Following discharge from the hospital, ‘A’ will need to submit his insurance claim to the insurance company with all the required original documents. The insurance company will check all documents, process the application, and give a final approval on the submitted claim in accordance with the policy terms and conditions.
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‘B’ is covered with cashless insurance under the health insurance policy he holds.He is diagnosed with an illness, and decides to get admitted into a network hospital. Since ‘B’ has the cashless benefit, his family members get in touch with the third party administrator (TPA) to help him avail the cashless hospitalisation benefit. ‘B’ therefore gets excellent medical treatment without having to spend a penny from his own pocket. Following discharge, ‘B’ takes all the required claim-related documents to keep as records. In this case, ‘B’ will only need to bear those expenses that the policy explicitly states as not being covered.
‘C’ has a health insurance policy and on being diagnosed with an illness, he gets admitted in to a non-network hospital. In such a situation, it does not matter whether ‘C’ does or does not have a cashless medical cover – either way, he will not get this benefit from the insurance company, since he chose a non-network hospital.
‘C’ avails of the requisite medical treatment and bears the entire medical expenditure out-of-pocket. Following his discharge, ‘C’ files a claim for reimbursement with his insurance company with all the original supporting documents. The insurance company takes a microscopic look into each cost and only approves the amounts found reasonable and justified enough to be approved under the terms of the policy. The insurance company may approve either the full claim or only a part of it.
The stated reasons are mostly on the lines of the specific amounts not being justified or covered – for instance, the health insurance company may say that some of the hospital charges are relatively higher in comparison with the regular market norms and hence they will refuse to reimburse it.
‘C’ therefore will not be able to leverage the complete benefits of his health insurance policy, in spite of having an adequate cover. He will, therefore, need to personally bear the cost of all those expenses that are outside the purview of his health insurance policy.
As is clear in the above situations, getting medical treatment in a network hospital is always better and wiser.
Every health insurance policy clearly mentions the complete list of all the network hospitals they are associated with. It is a good idea to have the network hospitals list always handy for quick reference during emergencies. This turns out to be a blessing in the event of sudden hospitalisation, as the policyholder can immediately approach any of the network hospitals and capitalise upon the health insurance plan - either by getting medical treatment at reasonable costs or by availing the cashless hospitalisation benefit. In case of pre-planned hospitalisation, the policyholder must contact the TPA and get all the necessary approvals beforehand.
Policyholders pay premiums regularly and expect their health insurance policy to come to their aid in times of need. A part of this expectation is getting the best treatment without having to bear any additional expenses – opting for a network hospital provides just that.
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