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Dec 2021

Lebanon: Insurers tussle with hospitals over medical claim settlements

Source: Middle East Insurance Review | Oct 2021

Insurers, private hospitals and university hospitals have resumed discussions to try to reach an agreement on new terms for reimbursing the medical expenses of policyholders.
The dialogue was resumed a few days after private hospitals and university hospitals decided to require insurers to pay 30% and 40% respectively of the medical reimbursements in cash, with the remaining amount to be paid in ‘bank dollars’, with effect from 1 September. The hospitals’ decision was made after several months of unsuccessful negotiations with the Association of Insurance Companies in Lebanon (ACAL).
‘Bank dollars’ refer to bank accounts blocked by restrictions illegally put in place by banks in the first months of the financial crisis almost two years ago and which can be withdrawn in Lebanese pounds at the rate of LBP3,900 ($2.60) to $1.
The latest request regarding the terms of claims settlement by the hospitals is suspended until a viable common ground for all parties is found, according to sources familiar with the matter, reported L’Orient Le Jour.
The financial crisis in Lebanon has affected all strata of the economy, including the functioning of insurance companies. Consequences include banking restrictions on customers’ foreign currency accounts, the depreciation of the Lebanese pound and a multiplicity of exchange rates set up by the Bank of Lebanon. Hospitals have also had to cope with the increase in their expenditure following the removal - total or partial - of subsidies for fuels, drugs and medical equipment.
ACAL considers that the terms demanded by the hospitals are not viable for insurers, especially in such a short time frame. “The premiums were calculated based on LBP3,000 to $1 (by combining the amounts payable at the official rate of LBP1,507.5 and those at LBP3,900), while hospitals ask us to assume support based on LBP10,000 to $1,” said ACAL president Elie Nasnas. M 
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