The difference between network and non-network hospitals in health insurance

The hospitals with which the insurance company has a contract for the treatment of its customers are called network hospitals. To simplify further, these are the hospitals where your insurance company provides you with the facility of cashless treatment. That is, you do not have to spend out of your pocket to get treatment at any network hospital. Apart from this, if you have a policy in which you have to pay some percentage or a deductible, then it may be useful to know that in the network hospitals of the insurance company, you get cheaper treatment than any other hospital.

So we’ve checked off cashless facility and affordability - what about the number of hospitals in the network? Every insurance company wants to have the maximum number of hospitals in its cashless network so that its customers can get the best facilities. The number of hospitals in the network of different insurance companies also varies. In most health insurance companies, this number is more than 2,500. If you take myUpchar Bima Plus Health Insurance then you will get cashless treatment facility in more than 7,000 hospitals. Along with this, you also get the benefit of 24x7 free tele-OPD under this policy.

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Another situation can occur in the case of network hospitals; however, it is rare, so it is not commonly discussed. Let us understand it with an example: suppose Rahul, a resident of Delhi, has health insurance, but his policy does not have the option of cashless facility. In such a situation, even if the company has 10,000 hospitals in its network and he gets treatment in one of them, Rahul will not get cashless treatment. On discharge from the hospital, he will have to pay the entire bill out of his pocket and later claim reimbursement with the TPA or the insurance company along with all the necessary documents. The company will verify the application and documents and transfer the claim amount to Rahul's account as per the terms and conditions of the policy.

Before you get excited about your health insurance company having more hospitals in its network than any other company, consider the following things:

• You should check whether there are reputed big hospitals in the company's network or not.
• You should check whether there are budget/small hospitals and daycare centers along with large hospitals in the company's network.
• You should verify whether the small and big hospitals around your house are on this list.
• Apart from this, find the hospitals near the places you often visit (like your office or your parent's house), since an emergency can occur at any time and place.

(Read more: What is emergency medical coverage in health insurance)

There are three parties involved in filing a claim at a network hospital. First, the person who has taken the insurance and wants to file the claim. The second party is the hospital where the insured is being or has been treated. The third party is the insurance company or TPA that processes the claim. The claim comes in two situations (planned hospitalization and emergency hospitalization) as well as in two forms (cashless claim and reimbursement claim).

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• Planned hospitalization: When you are admitted to the hospital for the treatment of a disease by predetermining the day and time, then it is called planned hospitalization. For this, you have to inform the insurance company by filling the pre-authorization form at least 24-72 hours before the admission. After getting pre-approval from the company, you can get admitted to the hospital for treatment.
• Emergency hospitalization: Whenever a sudden problem (injury or illness) has to be admitted to the hospital for treatment, it is called emergency hospitalization.
• Cashless claim:  If your insurance policy has a cashless cover, then you will not have to spend anything out of your pocket for getting treatment in a network hospital. The insurance company settles the entire bill by contacting the hospital.
• Reimbursement: If your policy does not have a cashless cover or cashless claim is taking more time, then you can also claim reimbursement later by paying the bill yourself at the network hospital.

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If you have understood the concept of network hospitals then understanding what non-network hospitals are will not a very difficult task. A non-network hospital simply means that your health insurance company does not have an agreement with that hospital. If you get treatment in a non-network hospital, you do not get the facility of cashless treatment. On getting treatment in a non-network hospital, you will have to pay the entire bill of treatment from your own pocket. Later, you can file a reimbursement claim by attaching your KYC documents along with the form, original bill, test reports, X-ray results etc. Usually, your hospital bill is reimbursed after verifying your documents. 

(Read more: What is Hospital Cash Policy)

Generally, reimbursement can be claimed for treatment at any non-network hospital. But there are some situations in which you cannot claim and even if you do, you will not get the reimbursement. Below are some such situations:

• On getting treatment in a blacklisted hospital. However, in case of emergency, you can get a claim till your condition is stable, but after that, you will need to be admitted to a network hospital.
• In case of any doubt regarding disease or treatment. The claim amount will be released only after thorough investigation and only some percentage of it may be given.
• The insurance company can refuse to pay the claim for hospitalization if the hospitalization is not required.
• The insurance company may not give the claim even if you are admitted to the hospital without consulting the doctor.

(Read more: Policyholder's responsibilities during claim settlement)