Health insurance Reasonable and Customary Clause

Описание: Insurance companies protect themselves from being overcharged by hospitals.

They have enough data and information about the rates chargeable for a standard treatment in a particular graded hospital in a certain geography.

If your hospital charges significantly more than other hospitals in that same geographical area for a particular treatment, the insurer can refuse to pay the overcharged amount and pay only the standard rates charged by similar graded hospitals in the same area, under the ‘reasonable and customary’ condition in every health insurance policy.

Let’s understand this better with the help of an example.

Dinesh, 45 years old, must undergo heart surgery next month. He visits a hospital where he finds out that his surgery will cost him INR 5 lakhs.

The insurance company determines that there is overbilling, the reasonable charges for the surgery shouldn’t be more than INR 3 lakhs, based on their research of the same procedure across multiple similar quality hospitals in the area.

In this case, the insurer will pay only the reasonable charge of Rs. 3 Lakhs, and Dinesh will have to foot the remainder of the amount of INR 2 lakhs.

Consumables cover in Health Insurance

The share of consumables in hospital bills has also increased significantly during the pandemic. Earlier, they occupied around 3-5% of the medical bill.

However, after the pandemic, the share of consumables has increased to 25-30%.

Consumables are medical items that have to be discarded after use such as PPE kits, masks, gloves, crepe bandages, syringes, etc.

Hospitals across India have made it mandatory for their staff to wear protective gear during the pandemic while treating Covid patients.

It has become imperative to consider these points when buying health insurance in these times.