Insurance regulator IRDAI wants appropriate action to be initiated against hospitals that deny cashless facility to policyholders for treatment of COVID-19 despite entering into such arrangements with insurers.

Besides initiating action, as provided under the Service Level Agreement (SLA), the general and health insurers concerned should immediately report the conduct of the network providers (hospitals) to the appropriate government agencies of the concerned State or area. The action taken may also be published on the insurer’s website, IRDAI said on Tuesday.

The regulator said it has been brought to its notice that some hospitals are not granting cashless facility for treatment of Covid-19 despite such arrangements with insurers. Some hospitals are also demanding cash deposits from the policyholders.

In a circular, IRDAI said insurers must ensure where the policyholder is notified about the cashless facility at the empanelled network provider, the facility is made available in line with the terms and conditions of the policy contract and as per the SLA terms.

The regulator wanted the insurance companies to put in place an exclusive redressal mechanism to address such grievances related to denial of cashless facility for COVID-19 and other grievances against such hospitals that are enlisted as network providers. It advised them to also put in place continuous communication channel with all the network providers for prompt resolution of the grievances of policyholders.

“Where any network provider denies cashless facility and deviates from agreed terms of the SLA, insurance company shall take an appropriate action against such network providers as provided in SLA. Also, where policyholders’ interests are adversely affected because of the conduct of the network providers, such instances may be immediately reported to the appropriate Government agencies of the concerned State/area,” the circular said.

Separately, in a press release, IRDAI said it is essential for all hospitals that have entered into SLAs for providing cashless facility to extend the same for any treatment to the policyholders, including COVID-19 treatment, in accordance with agreed provisions.

Policyholders are entitled to cashless facility at all such network providers with whom the insurance company/TPA has entered into an agreement in accordance to the norms of SLA. In the event of denial of cashless facility, the aggrieved policyholders may send a complaint to the concerned insurance company.