Why your cashless health insurance claim could be denied

The Economic Times 11/10/2017

A health insurance policyholder pays his annual premiums diligently with the hope that in case of hospitalisation, the insurance company will bear the costs up to the limit of the policy's sum insured amount. As part of the contract, the insurance company is liable to pay the claim to the hospital on behalf of the insured. However, there can be times where the insurer will not settle your claim. Read on to find out why this can happen.

Know your claims
The insurer processes every claim received from two angles - cashless or reimbursement claims, and on the basis of network or non-network hospitals.

In a cashless claim, the policyholder is not expected to pay the hospital bills as the insurer reimburses the same. In a reimbursement claim, the policyholder has to pay the hospital bills and then it is reimbursed by the insurer.

Some hospitals enter into an agreement with insurers to offer cashless claims for every hospitalisation. Such hospitals are part of the list of network or empanelled hospitals. Those that are not on such a list are called non-network hospitals and claims are processed on a reimbursement basis and not on a cashless basis.

Of late, hospitals and insurers have started entering into agreements even for certain treatments, procedures and operations like knee replacement. Such an arrangement is known as preferred network hospitals or agreed network hospitals and the claim is cashless.

In addition, insurers may even have a negative list. Insurers prefer not to settle claims from these hospitals.

When a cashless claim can be denied
As a policyholder, one should be aware that even a cashless facility can be denied in a network hospital. Such an incident may arise if the information sent by the hospital is insufficient or if the ailment is not covered under the policy or if the request for pre-authorisation is not sent in time. "In a cashless situation, the hospital might not be able to give all the details required for the insurer to arrive at a decision. When an insured approaches a hospital with some symptoms, the treating doctor might not know the specific diagnosis and consequently the insurer might not be able to decide on the admissibility," explains Parag Ved, executive vice president, consumer lines, TATA AIG General Insurance.

But, even if the cashless facility is denied, one can subsequently, on discharge from the hospital, submit the claim for reimbursement.

At times, there could be a medical emergency and one may have to get oneself or a family member admitted to the nearest hospital which may turn out to be a non-network hospital. "If the policyholder is seeking treatment at a hospital which is not emplaned with the insurer, the request for cashless claim will be denied," says Anurag Rastogi, chief actuary and head - retail underwriting and claims, HDFC ERGO General Insurance Company. In such a case, the claim will only be processed on re-imbursement basis.

Once admitted in hospital
Hospitalisation can either be a planned one or it can be a medical emergency. Under either of these circumstances it's important that the insurer is intimated immediately upon hospitalisation by submitting the pre-authorisation form. In a planned hospitalisation, intimate the insurer early on about the forthcoming claim.

And if it is an emergency hospitalisation, the claim intimation must be sent to the insurance company within 24 hours. "In planned admissions, always take the pre-authorisation from the insurer/third-party agent (TPA) in advance before admission. This will ensure that there would be no hassles at the time of admission for doing the necessary paperwork," says Ved. Some of the information other than basic details that one may share with the insurer will include policy number, name of the insured person who is hospitalised, nature of illness or injury, date and time in case of accident.

To keep the cashless claims settlement smooth, ensure that the pre-authorisation form has been filled up by the treating doctor with all the information about the treatment and the expected cost of treatment and is sent to the insurer.

After leaving the hospital
Once the patient is discharged from the hospital, in case of a cashless claim, the insurer settles the bill. However, in case of a claim on reimbursement, the insured has to pay all hospital bills and collect the original documents of the treatment undergone and expenses incurred. Along with some other documents, they have to be sent to the insurer to get them reimbursed.

Some of the indicative list of documents that needs to be sent includes

•Filled up claim form along with the original discharge summary,
• Doctor's consultation reports, hospitalisation and other medical bills,
• Receipts in original,
• Investigation reports, self-declaration or an FIR in case of accident cases.

It's better to get the list of required documents from the insurer as each one would have its own specific list. The insurer may ask or additional documents, so follow up with them to ensure that they have received all required documents.

If the hospital is not registered, you will need to get information such as the number of beds, availability of doctors and nurses round the clock and its registration number on a paper with the hospital's letterhead on it. In case of non-network hospital, you may have to get the hospital and doctor's registration number in hospital letterhead and get the same signed and stamped by the hospital.

The claim settlement timeline
According to the Insurance Regulatory and Development Authority of India (IRDAI) guidelines, an insurer has to settle a claim within 30 days from the date of receipt of the last necessary document. In the case of delay in the payment of a claim, the insurer is liable to pay interest from the date of receipt of last necessary document to the date of payment of claim at a rate 2 percent above the bank rate.

However, the insurer may initiate an investigation before paying the claim. Such an investigation has to be initiated at the earliest, i.e., not later than 30 days from the date of receipt of last necessary document. In such cases, the insurer has to settle the claim within 45 days from the date of receipt of the final document. If they delay it beyond 45 days, the insurance company will have to pay the policyholder an interest at a rate of 2 percent above the bank rate from the date of receipt of last necessary document to the date of payment of claim.

What you should do
In order to keep the claim settlement process smooth, it is not enough to just disclose all material health information to the insurer at the time of buying the policy but even intimating the insurer with the requisite information at the time of admission in a hospital plays an important role. So if you or a family member is getting admitted in a hospital, make sure you have all the required paperwork handy and know the claims settlement process of the insurer. If it so happens that it is not a network hospital or if the particular procedure is not covered, you will have to pay up the hospital bills upfront and get the amount reimbursed later.