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Insurance policyholders frequently encounter higher hospital charges than individuals who pay for medical services out of pocket. This situation elevates the insurers' liabilities because insurance companies must cover the medical expenses incurred by the policyholders.Therefore, to lower the losses, the insurance companies become partners with various hospitals across the country and negotiate the cost of treatment to keep it within a reasonable limit. These hospitals are network hospitals with contractual agreements with the insurance company. On the other hand, if the hospital does not have such an agreement with your insurer, it is called a non-network hospital.With this guide, we want to answer a few questions that every insurer has in their mind. So, we will focus on network and non-network hospital meanings, the differences between both types, the factors involved, and more.Also read: What is Co-Pay in Health Insurance?
Meaning: Network and non-network hospitals
When it comes down to choosing health insurance , many people focus on low premiums more than the benefits it offers. They overlook some important aspects of the insurance policies, which become crucial in a health emergency.One essential aspect you must pay attention to is checking which hospitals your insurance policy is in network with. If you are unsure of the meaning, we have provided a comprehensive explanation in this guide.
Network Hospital
A plain meaning of network hospital is that insurance companies appoint a network of hospitals that charge patients having their company's policy less than others. It is a strategy insurance companies adopt to save money and attract customers.Therefore, whenever the customers need medical assistance, they go to a hospital present on their insurer's panel. It can reduce the reimbursement payouts for the insurers when their customers undergo treatment. In return, the customers can enjoy lower medical bills and better health care.But why do the hospitals and doctors agree to this deal? Because they get more business from the insurance company's network. The insurance company directs its customers to network hospitals and doctors when they need medical attention. The network hospitals and doctors benefit from the increased volume of patients and the steady income.With a cashless medical insurance plan, you can save money on your treatment by visiting a network-listed hospital or doctor. But without one, you will pay more for the same services at the empanelled hospital.
PPN Network meaning
PPN Network is an acronym for Preferred Provider Network. It is a network of hospitals that have a tie-up with health insurance companies to offer cashless claim settlements to their policyholders. The PPN Network also follows a standardised tariff structure for standard medical procedures, reducing costs for insurance companies and customers.Further, these PPN hospitals also help you benefit from Hospital Cash Insurance . If you have opted for this add-on benefit plan with your existing health policy, you'll not have to worry about other charges during your stay in the hospital.With Hospital Cash Insurance, you will receive a fixed amount daily during hospitalisation. This daily allowance can help the policyholder meet different miscellaneous expenses, like nursing care, travelling to and from the hospital, etc.
Non-Network Hospital
Going to a non-network hospital as a policyholder will cost you time and money. You will pay for the treatment first and then wait for your insurance provider to pay you back.So, policyholders should avoid non-network hospitals as much as they can. They should opt for network hospitals to get cashless treatment and save time and money. Also, the repayment can get delayed; sometimes, the insured person does not get the entire claim amount.Also read: 5 Factors to Buy the Best Cashless Health Insurance Policy
Difference Between Network and Non-Network Hospital
Various noticeable differences between a network and a non-network hospital make considering these factors crucial. Also, it is not like you will not get treatment at a non-network hospital. The doctors will provide you with medical attention but at standard rates.
| Factors | Network Hospital | Non-Network Hospital |
| Cashless Facility | Cashless facilities are a prime factor in differentiating a network hospital from a non-network hospital. Thus, you don't have to spend money out of your pocket when you visit a hospital for treatment. Your insurer will settle these bills directly. | In contrast, a non-network hospital will not provide you with a cashless facility because it is not in the contract with your insurer. Here, you can only file a reimbursement claim. Thus, you will pay for treatment first, and your insurer will reimburse that amount. |
| Claim Process | In a network hospital, you only need to show your health card or policy number and complete a pre-authorisation form. Your insurer will directly coordinate with the hospital on your behalf. Therefore, the claim process is smooth and fast. | When a healthcare provider does not have a hospital tie-up agreement format, it cannot coordinate with your insurer in real-time. Hence, you must keep all the bills and reports safe and submit them with your claim form. This process is tedious and takes time, and you must continue to follow up with your insurer. |
| Cost | Network hospitals charge a lower fee from policyholders, as they have a negotiated tariff structure with the insurance company. They also follow a standardised rate list for standard medical procedures, reducing costs for the insurance company and the customers. | A non-network hospital can charge a higher fee from policyholders, increasing the cost of repayment for the insurers. It is because there is no agreement between your insurance company and the medical service provider. Additionally, these hospitals may charge extra for some services or tests. Hence, it increases the burden on your pocket, as the insurer may not reimburse it. |
| Cash Arrangement | It is a significant difference where network hospitals take the lead, as you do not have to worry about arranging the cash. When you're worried about your or your loved ones' health, arranging money can be cumbersome in a health emergency. Therefore, insurers took the initiative and provided policyholders with cashless treatment facilities. | When you visit a non-network hospital, they ask you to pay for admission. Even if the case is severe or the amount is enormous, you will have to arrange the money to get the treatment. |
| Quality | Quality is usually better in the network hospitals as most are reputed and accredited. Further, to qualify for a partnership with insurance companies, they must follow and pass the criteria, guidelines, and protocols set by the insurance companies. | These hospitals can vary in quality and reputation as they do not have an affiliation with the insurance company. There can be some hospitals that need to follow best practices or adhere to the latest medical norms. |
Therefore, these significant differences between a network and a non-network hospital can help you decide which policy to opt for. Also, always check the list of hospitals with partnerships with your insurance provider. It will save you from surprises in unfortunate situations.Also read: What Is GMC and GPA Insurance Policy?
How a Network and Non-Network hospital affect your health claim
Insurers often provide cashless treatment options at hospitals in their network. It signifies that you can seek admission to a hospital within the insurance network during a medical emergency. Then, let the Third-Party Administrator (TPA) know about your cashless claim.After discharge, the TPA will gather the required bills from the hospital. Further, the TPA will submit all documents to the insurer and pay the full amount directly to the hospital.If you require hospitalisation and your plan does not provide cashless facilities, you must pay for the medical expenses upfront. You need to send the documents verifying your expenses to your insurance company. They will review the bills and reimburse you according to the policy rules.Also, note that you won't receive reimbursement for any costs outside your policy's coverage amount. You will get paid only for the expenses that the policy clearly says.People may run to the closest hospital for quick medical help during emergencies. They may end up in a hospital their insurance provider does not cover. It means they will not get any benefits from their plan. It does not matter if the hospital has cashless services or not because they are getting treatment from a non-network hospital.Furthermore, the insurance company will thoroughly examine all expenses when requesting reimbursement. It will only approve those deemed reasonable according to the policy terms and industry standards.Also read: Cashless Health Insurance Claim Challenges
Conclusion
In summary, network hospitals provide many benefits, like cashless treatment, lower costs, faster claim processes, and quality care. On the other hand, non-network hospitals charge higher fees, require upfront payment, have tedious claims, and have inconsistent quality. Therefore, policyholders should opt for network hospitals as much as possible to avail themselves of the full benefits of their health insurance and avoid financial difficulties.
FAQS - FREQUENTLY ASKED QUESTIONS
What will happen if an insured person gets admitted to a non-network hospital ?
Individuals who seek treatment at a hospital outside their network will encounter difficulties and expenses. They must pay upfront and await reimbursement from their insurance provider. However, they may only get back part of the amount, as the insurance company may cut some parts or put some limits. Further, the insured must collect and keep all documents and bills safe to make the claim. So, people should avoid non-network hospitals as much as they can. They should go to network hospitals to get treatment without paying anything and save time and money.
Do all network hospitals offer cashless facilities ?
Not every network hospital has a cashless facility for policyholders. The policyholder may have to pay for all expenses at a network hospital. After the treatment, the insured can submit the documents to claim reimbursement. It can happen for different reasons, like:
Your insurance company or plan has no cashless deal with the hospital.
The hospital has used up its cashless quota with your insurance company for the month or year.
The hospital does not have the right equipment or people to handle cashless claims.
So, it is advisable to review the list of network hospitals before you go for treatment. Also, remember to carry your health card or policy number.
Where can I get a network hospital list for cashless health insurance ?
You can find the network hospitals for your cashless health insurance by visiting your insurer's website. You can also check the cashless hospital network list or search by hospital name. Further, you can contact the customer care department of your insurance company and ask them for a list. Also, some insurance providers send a list of network hospitals with a copy of the health policy. With cashless health insurance, you can get treated at network hospitals without paying anything. These hospitals partner with your health insurer and offer cashless facilities to you in case of any health emergency.
Do network hospitals provide cashless OPD treatments ?
Some cashless health insurance plans have OPD treatment. OPD treatment is when you get medical services without staying in a network hospital. It covers doctor visits, dental care, eye care, tests, medicines, and more. You do not pay anything when you use these services with cashless OPD treatment. The insured person only needs to show a health insurance card or card at your insurer's network hospitals or daycare centres. You can also get money back for OPD costs if you go to a non-network hospital or centre. OPD coverage benefits and limits vary by health insurance plan and insurer.
Do Group Medical Coverage (GMC) policies have network hospitals ?
Yes, your employer's Group Medical Coverage (GMC) policies consist of the network hospital benefits. You can find the list of eligible network hospitals in the hard or soft copy of your policy sent to you. You can ask your policy providers to email you the list if they did not give it in the policy. Also, this facility may depend on your employer's insurance choice. You cannot use it if your employer picks a policy that doesn't have this benefit. You have to go to a non-network hospital for treatment.
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
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