How does the 'Cashless Everywhere' system benefit health and general insurance policyholders?

Customers can choose hospitals outside their insurance company's networks, experience swift settlement of claims

Published: Jan 25, 2024 05:15:03 PM IST

Updated: Jan 25, 2024 05:53:08 PM IST

Under this 'Cashless Everywhere' system, policyholders can get treated in any hospital of their choice, and a cashless facility will be made available even if the hospital is not in the network of the insurance company; Image: Shutterstock

On Thursday, the General Insurance Council (GIC) in consultation with general and health insurance companies announced the ‘Cashless Everywhere’ initiative. Under this system, policyholders can get treated in any hospital of their choice, and a cashless facility will be made available even if the hospital is not in the network of the insurance company.

“Cashless Everywhere will make customers’ lives easy. Today, only about 63 percent of customers opt for cashless claims, while others apply for reimbursement as they might be admitted to hospitals outside their insurer network. This puts significant stress on their finances,” stated Tapan Singhel, MD and CEO of Bajaj Allianz General Insurance, and chairman of the GIC in a press release. Forbes India explains how this new scheme works and how it is likely to benefit policyholders:

What are the new rules, and what has changed?

Currently, the cashless facility is only available at hospitals if the insurance company has a tie-up or a set agreement. Unless there is a tie-up, the policyholder cannot access the cashless facility, and has to go for a reimbursement claim, which delays the process further.

With this new scheme, policyholders can get treated in any hospital of their choice, even though it is not a part of the insurance company’s network, and avail the cashless facility. This new system is expected to be extremely beneficial for users, especially senior citizens, as they no longer need to worry about the hospital network or arrange cash for their treatment.

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How can someone avail this new system?

As per the guidelines set by the GIC, there are three rules that policyholders need to keep in mind:

1. For elective procedures, the customer should inform the insurance company at least 48 hours before admission.

2. For emergency treatment, the customer should inform the insurance company within 48 hours of admission.

3. The claim should be admissible as per the terms of the policy and the cashless facility should be admissible as per the operating guidelines of the insurance company.

How will policyholders benefit from this system?

This groundbreaking initiative, says Siddharth Singhal, Business Head - Health Insurance at Policybazaar.com, "empowers policyholders to access treatment in any of the approximately 40,000 hospitals nationwide."

Right now, when customers go to a non-network hospital, they need to pay first and later get a reimbursement from their insurance company. There is a lot of paperwork involved and significant delays, especially with multiple query cycles and coordinating with the hospital multiple times. This makes the process very lengthy for customers.

Singhal of Policybazaar.com explains, "The new system would also reduce the chances of reimbursement rejection, which pose a financial burden on the policyholders. This initiative will additionally benefit individuals residing in tier 2 and tier 3 regions, especially those in remote areas across the country."

However, the Cashless Everywhere system will encourage many more customers to opt for health insurance. Singhel added, “We see this as a step towards reducing and in the long run, eliminating fraud, which has been plaguing the industry in a big way and reducing trust in the system. Overall, it’s a win-win for all the stakeholders”.