Health insurance is a technical concept wherein there are a lot of complicated jargons used in the policy. That is why your customers look to you to guide them on the meaning and implication of the technical concepts of their health insurance plan. Your guidance is sought two times– one when your customers buy the policy and two when there is a claim. In fact, at the time of claim, your clients want your help to understand the claim process.
Health claims, as you must know, are settled in two ways–
- Cashless settlement
Cashless settlements are the easiest as the hospital bills are directly taken care of by the insurance company. As such, your client does not have to bear the financial burden of medical expenses. In fact, if your clients buy a health insurance plan offered by public sector health insurers, they get the benefit of PPN rates. Do you know what the benefit is? Let’s see-
What are the PPN and PPN rates?
PPN in health insurance stands for Preferred Provider Network. It is a network of hospitals which are tied up with the health insurance company to provide cashless health claim settlements to policyholders.
PPN rates are specialized rates listed by PPNs for customers of public sector health insurance companies with which the insurance company has a tie-up. PPN rates are specified for a list of specified illnesses only.
When does the PPN rate apply?
PPN rates would be applicable only if –
- The health plan is bought from a Government health insurance company. There are four such companies which are –
- The New India Assurance Company Limited
- Oriental Insurance Company Limited
- United India Insurance Company Limited
- National Insurance Company Limited
- The illness is a listed illness as prescribed by the insurance companies
- Medical treatments are taken at the networked hospital of the insurance companies (PPN)
PPN rate v/s Cash rate v/s non-PPN rate
Now you know what PPN rates are. But do you know how they are different from other rates applicable in health insurance claim settlements?
Every hospital, which has a tie-up with an insurance company, maintains three different rates for the same treatment. They are–
- PPN rates applicable for claim settlements under plans offered by public sector health insurers
- Cash rates applicable if there is no health insurance claim and the treatment costs are payable by the patient in cash
- Non-PPN rates applicable for claim settlements under plans offered by private health insurance companies which are tied-up with the hospital
Let’s understand with an example–
Hospital ABC has three rates for angioplasty–
|PPN Hospitalization rate||Cash rate||Non-PPN Hospitalization rate|
|INR 1.5 lakhs||INR 2 lakhs||INR 2 lakhs or more|
Fig: Example Table
For the example mentioned above, if your customer has a policy issued by any of the four Government health insurance companies, claim for angioplasty would be at INR 1.5 lakhs. In the absence of a health plan, or in case of reimbursement claims, the applicable rate would be INR 2 lakhs. If your customer has a health plan offered by a private health insurance company, the claim could be more than INR 2 lakhs.
This has also been stated in a MoneyLife article by M.Ramadoss, Chairman, New India Assurance Company that “insurer-funded healthcare cost is more than individual funded cost”. The PPN rates have come into play to handle this situation.
The bottom line
If your clients buy a health insurance plan from public sector health insurance companies, educate them about the concept of PPN rates. This would help them avail cashless claim settlements at the networked hospitals and also result in reduced claims. Since the claims would be reduced, the amount of remaining sum insured would become higher which can be used by your customers for future claims.