Difference Between Network Hospitals & Non-network Hospitals

With the advancement in the medical infrastructure, health care costs have also been on an upward trajectory, especially in metro cities. With the rising costs, access to good healthcare facilities and treatments at affordable costs has become challenging. This is especially true for the mid-income and lower-income groups. However, thanks to health policies, medical treatment has become easier and simpler! For example, with health insurance, you can safeguard yourself from rising medical costs in case of hospitalisation. Plus, you can still opt for the best treatment without worrying too much about the expenses. In fact, things get easier and hassle-free if you have availed of the cashless facility at network hospitals.

In this article, let us decode the terms network and non-network hospitals for you.

To set a backdrop sometimes hospitals may levy higher charges to patients with a medical insurance policy than patients without a health policy. Hence, insurance companies partner with selected hospitals and negotiate costs to reduce their indemnity costs. Not just this, this also helps insurers offer seamless claims experience to their customers when they partner with hospitals. The results are faster claim settlement and improved customer satisfaction.

This arrangement also works in favour of network hospitals since they get more patients through the network of the health insurance companies. Hence, all the hospitals associated with health insurance companies are called network hospitals. On the other hand, all the hospitals outside this network or with whom health insurance companies do not have any association are called non-network hospitals.

Check differences in table.

Having understood the basic definition of network and non-network hospitals, let us look at how it works and the role of a cashless facility. For that, let us take a few examples. 

Scenario 1: Mr. Mehta gets sick and needs to be hospitalised. He has availed of the cashless facility from his insurance company. He observes that one of the network hospitals is in proximity and offers the treatment suggested by medical practitioners. He gets hospitalised in one of the network hospitals and Mr. Mehta/his family member gets in touch with the Third-party Administrator (TPA) desk at the hospital. To simplify things, TPA acts as intermediaries between policyholders and insurance providers and plays a vital role in the smooth processing of health insurance claims.

Coming back to the example, Mr. Mehta’s family member then completes a quick documentation work, i.e., form-filling to avail of the cashless hospitalisation benefit. Once it is approved, Mr. Mehta can start the treatment, and the insurance company will bear all the expenses related to the hospital. Mr. Mehta only pays the deductible amount as per his policy document. Here, Mr. Mehta does not have to submit any bills/invoices to the insurance company. Also, there is no waiting period. Meaning, as soon as you share your health policy details, the hospital will immediately verify it. Once confirmed, all the hospitalisation expenses will be covered.

However, it is important to note that only his hospitalisation expenses would be covered. He may still have to claim reimbursement from his insurance company for medical expenses as per the terms and conditions.

Scenario 2: However, there is also a possibility that Mr. Mehta gets admitted to a network hospital but has not availed of the cashless benefit. In this case, Mr. Mehta needs to undergo treatment, get discharged, and claim reimbursement of the medical expenses. To claim reimbursement, he must follow a long and tedious process. First, he will collate all the bills and relevant documents and then share them with the insurance provider.

The insurance provider will evaluate his claim, assess the documents, and settle the claim as per the terms and conditions. The entire process may take a longer time to complete. However, not just time; in this case, Mr. Mehta also needs to arrange the funds for the treatment. This can become more stressful in scenarios where medical expenses are high.

Scenario 3: Mr. Mehta gets admitted to a non-network hospital. This may be because of the unavailability of the treatment in a nearby network hospital or an emergency. In this case, it does not matter if he has availed of the cashless facility or not. The process would remain the same as Scenario 2. He will get the treatment, pay the bills, get discharged, and then claim reimbursement.

In Scenario 2 and Scenario 3, the process is tedious, Mr. Mehta must arrange the funds, and it takes a longer time to settle the claims. Also, suppose the insurance company finds out the expenses are much higher than the standard/average expenses. In that case, it may partially settle a claim or even reject it based on the terms and conditions of the policy.

Here is a tabular representation of the classification between network and non-network hospitals.

Having a health insurance policy with a cashless facility is very important to guard your finances at the time of medical emergencies. Without this facility, you may have to undergo a long and tedious process of arranging funds, paying bills, collecting invoices, and sharing with your insurer for reimbursement. Definitely, a time-consuming process and tedious efforts.