Network Vs. Non-network Hospitals: What Is The Difference?

• Introduction
• What Is A Network Hospital?
• Claims Process In A Network Hospital
• What Is A Non-network Hospital?
• Claims Process In A Non-network Hospital
• Network Hospitals Vs. Non-network Hospitals: A Quick Comparison
• Network Or Non-network Hospital - Which One Is Better?
• How Many Network Hospitals Do Insurance Companies Have A Tie-up With?

When we buy health insurance, we tend to do our research around the insurer, its claim settlement ratio, sum insured required, product features, etc. However, many of us, sometimes, overlook the importance of an insurer’s network hospital list. We all have our preference of doctors whom we consult and the hospitals where we take inpatient treatment. And, it is important that our preferred hospitals are part of the insurer’s network list. 

Take the hypothetical example of Sid and Tara. Both get admitted to Hospital A, but they have health insurance policies from different insurers.

Now, Hospital A was on the network hospital list of Sid's insurer, which is why Sid's hospital bill was directly settled by his insurance company - and he just had to pay the minor costs that his policy did not cover. Tara's insurer, on the other hand, did not have any tie-up with Hospital A and hence, she had to pay the entire bill out of her pocket and claim it from the insurer through reimbursement after getting discharged.

To ensure that you experience a hassle-free cashless claims process like Sid, it's important to understand the meaning of network and non-network hospitals in health insurance.

A hospital which has an agreement with your insurer to settle inpatient claims directly and allow cashless treatment is called a network hospital.  Network hospitals are enlisted either by the insurance company or the third-party administrator (TPA), or jointly by both to provide a cashless claims service.

The process of claim settlement in a network hospital is relatively easier. Firstly, the documentation is comparatively lesser as all important documents including the discharge summary, doctor’s prescriptions, indoor case papers, etc are provided to the insurer by the cashless desk of the Hospital directly. This reduces the red tape and documentation on your side.

Secondly, it’s convenient for you in terms of cash flow management. At a network hospital, if the cashless settlement is approved by the insurer, you don’t have to pay out of your pocket first at the time of discharge.  The insurer or the TPA directly settles the bill with the hospital - and you’ll just have to pay for expenses like consumables, administrative fees, registration fees, etc. that may not be covered by your policy. 

In case you seek cashless settlement by the insurer at a network hospital, you should intimate your insurer about the hospitalisation & seek an initial pre-authorization. 

• If it’s a planned hospitalization, inform your insurer in time so that the pre-authorization is done by the time you get admitted. 
• In case of emergency, you should intimate your Insurer quickly after hospital admission to reduce the out-of-pocket expenses. 

The earlier you get a pre-authorization from the insurer, the lesser will be the out-of-pocket expenses. The insurer may first approve a lower amount & every time the total hospital bill exceeds the approved amount by the insurer, the hospital raises a fresh request for increasing the limit under pre-authorization. 

Then, before you’re discharged, the TPA or the hospital insurance desk will send the final bill and other required documents to the insurer. The insurer will evaluate, approve, and settle these bills directly. You won’t have to worry about anything as the claims and documents submission will be taken care of by the TPA and the hospital insurance desk.

A hospital which is not empanelled with the insurer (from where you have taken your Health Insurance) for cashless settlement of hospital bills/claim amount is known as a non-network hospital. 

If you get admitted to a non-network hospital, you don’t have the comfort of direct cashless settlement by the insurer. You’ll have to arrange the necessary funds and pay the entire hospital bill first out of your pocket and then claim a reimbursement of your hospital expenses from the insurer. 

Here, a lot of paperwork will be involved - you’ll have to submit various documents to the insurer like - a discharge summary, original bills, doctor’s prescriptions, original reports, a duly-filled claim form that is stamped and signed by the hospital authorities. Then, you’ll have to wait for at least 10-12 days (in some cases it may even take months) to get the money back from the insurance company. The entire process becomes very time-consuming and tedious. 

A network hospital, undoubtedly, will be the better option - it will save you the time and trouble of compiling and filing paperwork to get the claim. Also, you don’t have to pay the hefty hospital bills out of your pocket first before getting it settled by the insurer. 

You should choose a non-network hospital only if - 

• The treatment you need to undergo is not available on your insurer's list of network hospitals, or
• It’s an unavoidable emergency. (In this case, getting admitted to the nearest hospital will be the safer option, it doesn't matter if it’s a network or a non-network hospital.)

This number will differ from insurer to insurer. To know the number of hospitals in the insurance company’s network, you can either check the policy document of the plan you’re buying or the insurance company’s website. 

Here’s a list of some insurance companies and the number of network hospitals they have tie-ups with - 

^{This data was taken on 18.02.22}

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