Private hospitals in the Indian city of Bengaluru have threatened to stop the submission of cashless claims from public sector insurers from 1 June, reported The Times of India. The practice allows an insurance company to settle the entire claim amount directly with a hospital, with the patient not having to pay any amount.

The decision was made at a meeting of the Private Hospitals and Nursing Homes Association (Phana) on Wednesday where association members considered the problems faced by private hospitals due to insurers being reluctant to increase treatment costs. Over 400 hospitals in Bengaluru are members of Phana.

More than half (60%) of patients visiting a corporate hospital are said to utilise cashless insurance schemes. With the discontinuation of the cashless schemes, patients in Bengaluru will have to pay the hospital and then apply for reimbursement from the insurer.

According to online insurance marketplace Policybazaar.com, cashless claims policies prove to be beneficial for users, especially in emergency situations. Health insurers partner different hospitals after checking the quality of their medical services and negotiating rates for different procedures. These hospitals are known as network hospitals and when policyholders get hospitalised in any network hospital, their insurer will coordinate and settle the bill with the hospital via a third party administrator.