IRDAI’s Push for Health Insurance Reform: Shared Hospital Network and Faster Cashless Claims

In a strategic move to widen the reach and impact of health insurance in India, the Insurance Regulatory and Development Authority of India (IRDAI) has launched a shared hospital network and an expedited cashless claims mechanism. This initiative aims to improve affordability and transparency while reducing financial burdens on policyholders.

Uniform Treatment Rates Based on Government Schemes

The newly formed shared hospital network will follow treatment pricing models inspired by government schemes such as Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (PMJAY). By aligning costs with established public benchmarks, the network seeks to ensure consistency in charges across medical procedures, eliminating price discrepancies and enhancing trust among policyholders.

Broadening the Network: Hospitals Onboarded

In collaboration with the General Insurance Council, general insurers are onboarding hospitals into this unified framework. As of now, over 600 eye hospitals and 150 general hospitals have been approached to join the initiative. The long-term goal is to integrate up to 5,000 hospitals, substantially increasing the availability of affordable, cashless healthcare services across the nation.

Read More: IRDAI Expressed Concerns Over Rising Auto Insurance Commission.

Streamlined Cashless Claim Approvals

A significant element of this reform is the proposal to accelerate the cashless treatment process. The government is formulating guidelines requiring insurers to approve cashless treatment requests within one hour and settle claims within three hours of treatment completion. This rapid turnaround aims to reduce waiting times and ease the stress associated with claim approvals.

Simplification and Standardisation of Claim Forms

To support quicker processing, claims documentation will be simplified and standardised. A professional agency will be engaged to streamline the forms, making them more user-friendly for both policyholders and insurers. This step is expected to reduce errors, improve accuracy, and speed up the entire claims workflow.

Introduction of BIS-like Norms Across the Ecosystem

Plans are also underway to introduce Bureau of Indian Standards (BIS)-like benchmarks within the insurance ecosystem. These will promote better service quality, improve accountability, and ensure consistent practices among insurers, third-party administrators, and healthcare providers.

Rising Claims: A Case for Urgency

The move towards faster claims processing comes at a critical time. The number of pending claims has been steadily increasing:

• 2022: 8.5 million pending claims

• 2023: 17.5 million pending claims

• 2024: 25 million pending claims

The growing backlog highlights the need for reform and makes the case for a robust, technology-driven claims settlement system.

Long-Term Vision: Insurance for All by 2047

IRDAI has outlined a long-term vision to extend affordable and inclusive insurance coverage to every Indian citizen by the year 2047. The shared hospital network and simplified claims processing are key pillars in realising this ambition.

Key Benefits for Policyholders

While this initiative is still being rolled out, the anticipated benefits for policyholders include:

• Expanded access to cashless treatment across a broader network of hospitals

• Uniform treatment pricing that promotes transparency and controls costs

• Faster claim settlements, reducing financial strain during emergencies

• Improved accountability from insurers and hospitals

• Boosted consumer confidence, supporting greater health insurance penetration

Conclusion

This development marks a pivotal step in India’s journey towards a more equitable and efficient healthcare financing system, aligning public policy with the evolving needs of its population.

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