Healthcare providers in the UAE are facing serious challenges to the quality of their services to patients and sustaining their operations due to delayed payments from insurance companies.
Leading healthcare players in private sector said insurance firms withhold payments, totalling millions of dirhams, and have taken up to six months to clear claims, causing serious disruption to their cash flows, and forcing them to borrow from banks in order to continue running their operations, reported Khaleej Times.
Market insiders said healthcare providers have been sustaining heavy operating expenditures by taking loans and setting up a new department that only handles insurance-related activities.
Dr Azad Moopen, founder chairman and managing director of Aster DM Healthcare, said healthcare providers are under strain due to the delay in payments by insurance companies. Salaries still have to be paid to staff whatever collection problems healthcare institutions face.
In earlier days, he said the cash component of the business was 70-80%, which helped providers pay their employees.
"This is not possible now due to the fact that almost all the business is coming from insurance, which produces pressure on healthcare providers," he said.
He added insurance companies take, on average, three to six months to pay out on claims. "There are companies that pay up within 100 days, which is very rare. Most of the insurance companies take five months on average."
Apart from payment delays, healthcare providers face the issue of rejected claims. The first-pass rejection rate of some of the insurance companies is as high as 30%. Even after resubmission of claims, some of the insurance companies reject up to 15%, Dr Moopen added. Claim rejections and resubmissions significantly increase the time to secure claim settlement.
Dr Atul Aundhekar, CEO of healthcare services company Avivo Group, said that the Dubai Health Authority (DHA) has worked to try to resolve the problem by introducing new regulations.
Mr Ali Fareed Lutfi, head of payer regulation and licensing at Dubai Health Insurance Corporation (DHIC), said, "These new regulations stipulate both the period within which a provider has to submit a medical insurance claim and the timeframe within which an insurer has to pay the claim. The regulations grant the ability to the payer/provider to impose financial penalties on the other party if there is a delay in claim submission or claim payment."
"With the introduction of the new regulations, the claim cycle is standardised; it will become much more efficient and regulated and thus the duration including resubmissions from providers will become much shorter," he said.
Prior to the introduction of the new regulations last October, he said the time taken for claim submissions and payments were mutually agreed upon between providers and payers.