Page 189 - IC38 GENERAL INSURANCE

R. Key terms in health policies

1. Network Provider

Network provider refers to a hospital/nursing home/day care center which is
under tie-up with an insurer/TPA for providing cashless treatment to insured
patients. Insurers / TPAs normally negotiate favourable discounts on charges
and fees from such providers who also guarantee a good level of service.
Patients are free to go to out-of-network providers but there they are generally
charged much higher fees.

2. Preferred provider network (PPN)

An insurer has the option to create a preferred network of hospitals to ensure
quality treatment and at best rates. When this group is limited to only a select
few by the insurer based on experience, utilization and cost of providing care,
then we have what is known as the preferred provider network.

3. Cashless service

Experience has shown that one of the causes of debt is borrowing for treatment
of illness. A cashless service enables the insured to avail of the treatment up to
the limit of cover without any payment to the hospitals. All that the insured has
to do is approach a network hospital and present his medical card as proof of
insurance. The insurer facilitates a cashless access to the health service and
directly makes payment to the network provider for the admissible amount.
However, the insured has to make payment for amounts beyond the policy limits
and for expenses not payable as per policy conditions.

4. Third party administrator (TPA)

A major development in the field of health insurance is the introduction of the
third party administrator or TPA. Several insurers across the world utilize the
services of independent organizations for managing health insurance claims.
These agencies are known as the TPAs.

In India, a TPA is engaged by an insurer for provision of health services which
includes among other things:

i. Providing an identity card to the policyholder which is proof of his
insurance policy and can be used for admission into a hospital

ii. Providing a cashless service at network hospitals
iii. Processing of claims

TPAs are independent entities who are appointed by insurers for processing and
finalizing health claims. TPAs service health policyholders starting from issuance
of unique identity cards for hospital admissions up to settlement of claims
either on cashless basis or reimbursement basis.

183