Rip-off. That’s the word which comes to mind when you think of hospitals. To be fair, hospitals and money share the same platform in your nightmares. They make you to break into cold sweat when you wake up.

Thankfully, with a new policy effected by the government sometime ago, all the nightmares about hospitals and money can turn into sweet dreams with the introduction of a system known as “cashless facility” by health insurance companies.

Although health insurance by itself is not a new concept, the idea of getting discharged from a hospital without paying a single paisa is a reality thanks to the Third Party Administrators (TPA) incorporated into health insurance schemes.

While previously, the uppermost thought, as you lay on your hospital bed recovering from some form of illness, was the amount of money that you would have to cough up from your precious bank savings, now you only have to worry about the noisy visitors as the hospitals bills will now be taken care of by the TPAs.

Simply put, the TPA is an intermediary organisation licensed by an insurance company, with whom you have a standard mediclaim policy, to pay the hospital bills on your behalf.

As soon as you buy a health insurance policy from one of the insurance companies, the TPA licensed by the insurance company will take over and will provide the necessary information to the policy holders such as the terms and conditions, risks covered under the policy, the network of hospitals etc. This information is provided along with an identity card and an unique identification number to the policy holder which is the the literal “passport” to utilise the cashless facility at a hospital.

Says Dr Ramesh Somayaji who heads Rajshekar Hospital in J P Nagar, “an insured person who comes to our hospital just has to show the identity card provided by the TPA. We then fax the name and details of the patient to the TPA, which in turn, faxes back an authorisation letter to us. After this, the patient does not have to pay a single paisa for the rest of the stay in the hospital.”

The TPAs have a network of hospitals in each city across the country where the patient can walk in and utilise the cashless facility.

According to the Insurance Regulatory Development Authority of India, the TPAs are the link in the chain of integrated health care delivery systems that bring all the components of health management such as health insurance companies, hospitals, doctors, patients, pharmacies and preventive healthcare into a single entity.

Some of the TPAs in Bangalore are TTK Healthcare Services and Medi Assist India, Anyuta Medinet Healthcare, Medlife, Paramount and Guardian Health Management.

TTK Healthcare has a tie-up with National Insurance, New India Assurance, Reliance General Insurance, Oriental Insurance and ICICI Lombard General Insurance while Medi Assist is tied up with New India Insurance and Reliance General Insurance.

Speaking to Deccan Herald, Mr Shiva Belawadi CEO of Medi Assist, one of the TPA in Bangalore, says that there are three broad functions of the TPAs which are enrollment function, claims administration function and care delivery function.

Of the three, claims administration function and care delivery function of the TPAs are of interest to the customer or a patient. Claims administration function is the social function which includes networking with the hospital, pre-authorising cashless facility and reimbursement of hospital fees on behalf of a customer.

The care delivery function is a medical-oriented function in which the TPA have a liaison with the hospital with regards to pre and post hospitalisation care of a patient, different kinds of treatment protocol etc.

Health insurance is a growing industry in India with a potential of over Rs 90,000 crore but there is a general lack of awareness among the public. One of the major hurdle for health insurance is the fear among the public on what kinds of diseases will be covered.

Says Mr Belawadi: “Insurance by definition deals with fortuity — a concept of may or not happen. As such, health insurance covers all kinds of hospitalisation, whether through accident of disease but does not cover any pre-existing disease.”

Here again, Mr Belawadi clarifies and says, “the public fears the word ‘pre-existing’ and generally stays away from getting themselves insured which is wrong. For example, if a patient is a diabetic or a hypertension patient and is hospitalised for heart problem. Then the insurance company will definitely pay for the heart surgery costs because proving conclusively that a heart attack has occurred due to the pre-existing condition is difficult.”

From the end-user point of view, Dr Somayaji says: “Even pregnancy and delivery costs are covered under the various insurance plans but any complications to the baby after birth are not covered.”

As a parting shot, Dr Vivek Shenoy an ICU specialist doctor says: “A health insurance premium costs around Rs 500 to Rs 700 per year. By sacrificing the mobile phone bill for a month, an average middle class person can buy the health insurance which will stand him in good stead in the long run.”

By Visvas Paul D Karra