The Preferred Provider Network (PPN) of hospitals has gained much popularity in the health insurance sector - providing cashless transaction for policyholders in the four metropolitan and tier-I cities. The scheme was launched in the abovesaid cities last year in July, and is now slated to be extended to newer tier-II cities: Pune, Surat, and Vadodara.

A group of four public sector insurance companies - New India Assurance, United India Insurance, Oriental Insurance and National Insurance – had developed the concept of a PPN list of hospitals. This came about after private hospitals had allegedly charged higher payments from patients covered by health insurance, than those without it. The four companies lost over Rs 2,000 crore last year, as a result of higher health insurance claims.

Mr Segar Sampath, DGM, New India Assurance said, “The PPN network would be introduced in Pune, Surat, and Vadodara in the next two to three months after the success of the second phase of the PPN network launched in Hyderabad in April this year.” The scheme was originally scheduled to be launched in Kolkata in April 2011. That city would also see the plan kick-started anytime now.

PPN is workable only in hospitals that have been identified to provide cashless treatment. Hospitals outside the list will not be able to offer the benefit, and the policyholder will have to pay the hospital for treatment. He may, however, get it reimbursed later from the health insurance company.

Mr Sampath said, “Today, the network covers about 860 hospitals across the country. Even large hospitals like Bombay Hospital, which did not want to be part of the network, have joined in.” The list of hospitals is finalized after negotiation on standard rates applicable for a variety of surgical procedures

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