Faced with dues amounting to crores of rupees, hospitals have written to the central government asking that insurance companies introduce full insurance coverage to patients at extra cost.

This would help do away with the confusion that has come about since the introduction of cashless hospitalisation treatment.

At the same time, the medical fraternity and hospital associations have also taken up their cause with the Insurance Regulatory and Development Authority against payments from insurance companies being routed through third-party administrators.

Hospitals fear that they are facing enormous business risk when dealing with TPAs, many of whom do not have much of a net worth.

"Direct payments to hospitals from insurance companies will help mitigate this risk completely," said M L Bhakta, president of the Association of Hospitals.

Since the introduction of TPAs as intermediaries, many hospitals have been bleeding as they have not been paid for almost a year.

"The earlier process of patients paying hospital bills and then recovering the same from insurance companies was much better. Today hospitals are faced with delay in payments by TPAs, most of which have exceeding the 45 day grace period for payment of dues," said Bhakta.

Even as dues continue to mount, hospitals have no option but to continue to offer cashless hospitalisation treatment. Said Bhakta: "We have no choice as hospitals cannot refuse patients and as more and more customers take out medical insurance cover, we have to comply with the industry norms."

The insurance industry is not so perturbed over the fact that hospitals have not been paid by TPAs. A senior official with a leading public sector insurance company said: "Our risk product is for the policyholder and we are trying to improve our cashless hospital service for their benefit and not that of hospitals."

Hospitals have signed MoUs with TPAs whereby Mediclaim policyholders need no longer make payments upfront so long as they are not being admitted to treat pre-exisiting illnesses.

Said Bhakta: "We have asked the central government that insurance companies be persuaded to grant full insurance cover at additional premium, thereby also covering pre-existing diseases. This will help facilitate the problems hospitals face today."