If reimbursement becomes unavoidable, submit a complete file at the earliest.
Key Points
- A Policybazaar survey found health insurance customers reported a significantly better claims experience with cashless settlements than reimbursement claims.
- Cashless claims reduce financial burden as insurers directly settle hospital bills, while hospitals handle most documentation and paperwork.
- Reimbursement claims are usually required at non-network hospitals or emergencies and involve higher scrutiny, longer processing, and possible partial settlements.
- Delays often arise due to incomplete documents, additional medical queries, inspections, or slow responses, leaving policyholders to bear treatment costs.
- Customers can improve claim approval chances by seeking timely pre-authorisation, verifying hospital network status, submitting complete documents, and escalating unresolved claims.
A Policybazaar survey of 2,228 customers across metros and Tier-II and Tier-III cities found that cashless claims offer health insurance customers a better experience than reimbursement claims.
Cashless claims are simpler because the insurer settles the hospital bill directly. "This reduces the need to arrange a large sum during hospitalisation," says Shilpa Arora, co-founder and chief operating officer, Insurance Samadhan.
At network hospitals, negotiated package rates and a dedicated insurance or third-party administrator (TPA) desk make the process smoother.
"The customer is spared the burden of documentation, as it is handled by them," says Amit Chhabra, chief business officer, Policybazaar.
When reimbursement becomes unavoidable
Reimbursement claims arise when the hospital is outside the insurer's cashless network, or when an emergency forces the patient to use the nearest hospital.
"Many policyholders assume all hospitals are empanelled and discover the gap only at admission," says Arora.
Cashless approval at discharge typically takes three to four hours.
"Customers who do not want to wait may leave the hospital and file a reimbursement claim later," says Chhabra.
Why cashless approval is denied
Insurers may deny cashless claims over suspected fraud, non-disclosure, or a pre-existing condition that is still within the waiting period. Sometimes, the issue is procedural.
"Authorisation may remain pending if the insurer needs additional medical records or clarification from the treating doctor," says Arora.
Reimbursement claims drawback
Cashless settlements use package rates negotiated with hospitals.
"If the patient pays out of pocket, the hospital may charge its standard billing rate, which is usually higher," says Arora.
Reimbursement claims often arise at non-network hospitals. The insurer must assess whether the treatment was necessary and whether the charges are reasonable.
"The insurer may seek additional medical records and scrutinise every bill line by line, which can lengthen the processing time," says Arora.
If documentation does not fully support the claim, reimbursement can lead to partial settlement or repudiation.
Documentation burden shifts to customer
The document requirement may be similar for cashless and reimbursement claims. The difference lies in who submits the papers.
"In reimbursement claims, the customer has to organise and submit the documents and fill out the forms," says Chhabra.
Delays hurt finances
If documentation is in order, reimbursement claims usually get settled in seven to ten days, though the standard timeline is 30 days.
The window can extend if the insurer asks for missing papers or raises a medical or policy-related query.
"The policyholder may have to go back and forth between the hospital and the insurer to gather additional information, causing delay," says Arora.
Claims may also take longer if the customer delays responding to queries or if an inspection is carried out.
Every extra day leaves the policyholder carrying the hospitalisation cost, especially if the money has been arranged through a credit card or personal loan.
How to avoid this route
Customers should seek cashless approval well in time. "For planned hospitalisation, they should apply at least a day or two before treatment," says Kapil Mehta, co-founder, SecureNow Insurance Broker.
Some insurers may have a tighter window. "Customers should confirm the exact intimation window for their policy," says Saurabh Vijayvergia, founder and chief executive officer, CoverSure.
Inform the insurer as soon as hospitalisation is confirmed.
Vijayvergia says customers should respond quickly to pre-authorisation queries. "They should also check the hospital's cashless status immediately before admission as the insurer's network can change," he says.
Before discharge, ensure the hospital sends all papers on time. "If the insurer is under time pressure, it is more likely to ask the customer to file a reimbursement claim," says Mehta.
Steps to improve outcome
Review the hospital bill daily during treatment. "Billing errors are easier to correct while treatment is going on and harder to correct after the final bill is generated," says Vijayvergia.
Anticipate questions on the need for hospitalisation or whether the ailment was pre-existing.
"If such questions are likely, submit a note explaining your position clearly," says Mehta.
Submit the complete document set together, not in batches. "The document-submission window is 15 to 30 days from discharge. File within the prescribed window to avoid friction," says Vijayvergia.
If a claim stalls, escalate first to the insurer's grievance officer, then the Bima Bharosa grievance portal, and finally the insurance ombudsman.
Disclaimer: This article is meant for information purposes only. This article and information do not constitute a distribution, an endorsement, an investment advice, an offer to buy or sell or the solicitation of an offer to buy or sell any securities/schemes or any other financial products/investment products mentioned in this article to influence the opinion or behaviour of the investors/recipients.
Any use of the information/any investment and investment related decisions of the investors/recipients are at their sole discretion and risk. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons. Opinions expressed herein are subject to change without notice.
Feature Presentation: Aslam Hunani/Rediff
