IRDA intervenes in the cashless medical insurance controversy

Finally intervening in the cashless medical insurance controversy, Insurance Regulatory and Development Authority (“IRDA”) has, vide a circular dated August 24, 2010, issued directions on the changes made insurance companies in Preferred Provider Network of hospitals (“PPN”). PPN of an insurance company is the list of hospitals where cashless medical insurance facility is available for the policyholders. In the above circular, IRDA has issued the following directions:

a) If insurance companies make any change in the PPN, they must inform the policyholder of the nearest alternative hospital in the PPN where the cashless facility is available and the conditions on which the facility is available.

b) Where a policyholder has been issued a pre-authorisation for the conduct of a given procedure in a given hospital, or if the policyholder is already undergoing such treatment at a hospital, and such hospital is proposed to be removed from the PPN list, then the insurance company should continue to provide the cashless facility to such person, as if the hospital is still on the PPN list.