Denial of Cashless Claims in Health Insurance

Cashless claims in India have reformed drastically as people expect it while buying a policy. Gone are the days when a policyholder had to pay out-of-pocket before getting reimbursed by their insurers. Cashless claims are convenient, especially during emergencies as the policyholder can focus on their recovery rather than worrying about finances However, cashless claims can be denied due to various reasons. [1] In this article, we will walk you through the details of what is cashless health claims, the reasons why a cashless claim gets rejected, and what to do in case of denial of your cashless claims.

What is a Cashless Health Insurance Claim?

With this feature of health insurance the policyholder is relieved of financial burden during emergencies as the insurer settles the claim directly with the hospital and the beneficiary does not have to worry about paying out of pocket. Initially, policyholders could get cashless claims only at network hospitals of their respective insurers. However, in 2024 the General Council of India released a statement saying policyholders can now go cashless anywhere. With this change, policyholders can now avail cashless services at all hospitals (except for the ones blacklisted from the insurer’s list). 

Note that it is important that you inform your insurer about any planned hospitalisation 48 hours before hospitalisation and within 24 hours, (in some cases within 48 hours depending on your insurer) in case of an emergency to avail cashless facility.

Reasons why Cashless Claims in Health Insurance can get rejected?

These are reasons why a cashless claim can be rejected in health insurance:-

• Treatment is Not Covered Under the Policy:- Cashless claims can be denied if the treatment received is not covered under the health insurance policy like cosmetic surgeries, dental treatments, etc.
• Non-disclosure or Misrepresentation of Medical History:- Failing to mention any pre-existing disease or ailments while purchasing the policy can lead to rejection of the claim. Providing inaccurate or incomplete information about one’s health is also a reason for the denial of the cashless claim.
• Insufficient Documentation:- Having insufficient or incomplete documentation can lead to the policyholder’s claim getting denied.
• Treatment at a Blacklisted Hospital:- If a policyholder is getting treatment at a hospital that is blacklisted, then their claim can be denied. 
• Delay in Intimation or Claim Submission:- If the customer delays in informing their insurer about their hospitalisation or submitting their claim later than the deadline in their policy can lead to the rejection of the claim.
• Treatment does not Fall Under the Policy’s Waiting Period Clause:- Claims made during the waiting period for any treatment or ailments are not admissible. 
• Exhaustion of the Sum Insured:- Any claims made after exhausting the sum insured due to previous claims during the policy year are denied.
• Lack of Medical Necessity:- If the medical issue is not justified or is not in agreement with the protocol the claim can be rejected.
• Hospitalisation not Required:- If the treatment or cause does not require hospitalisation then the claim can be rejected.
• Specific Policy Clause or Sub-Limits:- Policies can have certain sub-limits or clauses that do not cover a cashless claim for treatments covered.
• Principle of Proximate Cause:- In case your reason for hospitalisation turns out to be different than stated or under any cause that is not covered under the health insurance policy then the claim is denied. For example, if the injury is due to horse riding or any adventure sport leading to a series of accidents then your proximate cause will be something that isn’t accepted by your insurer. In this case, your claim will be denied.

Understanding your policy document and going through it thoroughly is important. Having the stated documents, adhering to its terms and conditions, etc. should be a priority to avoid any hindrances during an emergency.[1]

What to do If Cashless Claim Denied

Rejection of a cashless claim can be a stressful experience for the beneficiary. The steps below can help address the issue and give a possibility to reverse the outcome:-

• Understanding the Reason:- The first step should be to understand the reason for rejection from the insurer. 

• Review your Policy Documents:- Going through the policy documents and verifying if the reason is mentioned in the terms and conditions is important to understand the situation better.

• Collect Necessary Documents:- All the necessary documents should be available with the customer to support their case. These documents may include medical records, hospital bills, ambulance bills, etc.

• File an Appeal or Grievance:- Many insurers offer an appeal process where the customer can process their complaint with their insurer. However, if the appeal process is delayed then they can also file a grievance with all their processed documents. You can reach out to an InsuranceDekho advisor to get help in appeal or grievance redressal.

• Legal Recourse:- If the claim denial was against the terms of the policy then the customer can as a last resort seek legal advice that can help them with their problem.

• Opt for Reimbursement Claim:- If the cashless claim is denied a policyholder can choose reimbursement claim. The customer is expected to pay out of pocket and can get reimbursed by their insurer according to the terms of their policy.

• Keep Communication Records:- A record of all communication with the insurer should be kept as a record as it will be helpful in case of disputes. Communication records can be in any form like emails, calls, or text messages.

• Stay Informed and Updated:- Being informed about any changes in regulations or guidelines by IRDAI that affect your claim is important.

If the customer is facing rejection of their cashless claim then they can opt for any or all of these points to either clarify their problems or get a solution to the said problems. A proper approach and verified documents and records are crucial things to remember as they make and help the customer’s case. [1] 

Conclusion 

A Cashless claim is a preferred way to get financial help from your insurer. However, denial of the claim can cause a burden to one's mental and financial health and can be a stressful experience. So, knowing and understanding the policy is the most important factor while purchasing it. Every policyholder should have a verified and proper set of documents while applying for a claim as it makes the process faster and smoother.

Reference

• [1] https://www.insurancedekho.com/health-insurance/news/11-top-reasons-for-the-denial-of-your-cashless-health-insurance-claims-10176