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Soon cashless hospitalization is all set to become a reality and playing a major role in health insurance will be third party administrators (TPAs) who will take the plunge into insurance once the required tie-ups are finalized. A number of TPAs have received their licences for three years commencing March 21, 2002, to March end 2005. So what is cashless hospitalisation all about? Cashless hospitalization means as a Mediclaim policyholder one will not have to run around paying off the hospital bills and getting a reimbursement later.

On the contrary the policyholder will be able to avail of medical services at designated hospitals and his bills will be settled through TPAs (third party administrators) who will additionally offer a 24 hours toll free helpline, access to physicians, specialties, diagnostic centers and ambulance services.

So far about 10 out of 14 TPAs have already been shortlisted by state insurers and the fee for the same has been set at 5.5 per cent for the north and south zones while for the east and west zone it is 5.4 per cent. In case of private insurers the fee set is around 10 to 11 percent.

Aimed largely at mediclaim policyholders who constitute about 99 percent, such developments in the Rs 500 crore health insurance sector it is hoped will reduce the rising claim ratio that has turned out to be a drain on the finances of general insurers all these years.

But how do state insurers expect TPAs to bring down claim ratios when there are finer details that are to be sorted out. Will merely flashing an identity card enable the policyholder to avail of medical services? The policyholder may have to firstly get a pre-authorisation letter that will guarantee payment of the bills to the TPA from the insurance company. Besides how will TPAs be able to ascertain whether the policyholder has bought cover for the treatment he needs to undergo? Also if that was the case every policyholder would invariably want to go for the best room available and the best treatment that he can get.

But certain bars need to be applied depending on the size of policy of the insured. A TPA can in no way interfere in the administration of treatment nor can the insurance company since it is not a part of the contract. So when a mediclaim policyholder walks in for treatment, and opts for a room that's highly priced who can stop him? Also how can we at our end ascertain the finer policy details such as policy amount, his coverage of illnesses etc. These issues it is expected will soon be sorted out.

In any case for Mediclaim policyholders truly times - are a changing from the days of yore to cashless transactions.