Preferred Provider Network (PPN) has been introduced by National Insurance, Oriental Insurance, NewIndia Assurance and United India Insurance to limit the mounting losses in the health insurance portfolio. The health portfolio has a high claim ratio of around 100-200% due to overcharging/excess charging by hospitals for the same disease.
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The Public Sector General Insurance Companies, along with TPAs, have worked out package rates for some of the procedures/hospitalization expenses, which are commonly claimed under our health insurance policies.
The PSU Companies have worked out the process of Preferred Provider Network (PPN) over a period of several months and offered rates for specified procedures to various hospitals. Those hospitals which have agreed to our package rates, would be part of our Preferred Providers, and thus a network of hospitals, which in short is called Preferred Provider Network (PPN) has been created.
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It has been decided to provide ‘CASHLESS FACILITY’ through their TPAs, for settling claims under their health insurance policies, only for treatments from the PPN hospitals. For any treatment from other hospitals, our health insurance policies will respond by way of reimbursement of expenses instead of ‘Cashless facility’.
The said arrangement is already in existence in the cities of Mumbai, Delhi, Chennai, & Bangalore since 1st July 2010. Subsequently it was expanded to Ahmedabad, Hyderabad & Chandigarh and in Kolkata it has been launched recently.
The purpose of working out such package rates and stabilizing the hospitalization costs will benefit the insured in many ways. Lower cost of every hospitalization will leave a larger balance in the Sum Insured in the policy for future hospitalization within the policy period. Lower cost will also reduce loading on policy premium at the time of renewal. We wish to clarify that this step is in the interest of all health insurance policy holders.
