Scenarios where your Cashless Claim could be Rejected

One of the most convenient features of a health insurance cover is its “Cashless claim” facility. There are instances where your cashless claim could be rejected for various reasons. According to the Insurance Regulatory Development Authority (IRDA), the number of claims rejected by life insurance companies for 2009-10 stood at 14,693 (while it was 12,781 in 2008-09). Let’s examine some common reasons why this could happen.

In cases where hospitalization is planned – i.e., you have decided the date of admission in advance in consultation with your doctor – you are advised to obtain pre-authorization at least two days in advance. In the event you do not have a pre-authorization, chances are that a cashless procedure might not go through. On a side note, pre-authorization forms are available at the hospital or on the Third-Party-Administrator (TPA) web portal.

In case of a medical emergency, you might not have details regarding the policy handy. Therefore, it is important to store all such information at a place accessible easily. Hospitals will require the cashless card, policy number and/or other details. Do make sure the insurance company is informed at the earliest. In case the policyholder is incapacitated, immediate family members should be aware of the policy details and should have access to the policy documents. A cashless claim might not go through if the procedure is not initiated within 24 hours of hospitalization – this could vary depending on insurers’ and hospital policies.

Cashless claim could get rejected on two counts:

a. Pre-Existing Disease Not Disclosed: Your insurer could reject your claim on the grounds that a pre-existing medical condition has not been disclosed. In such a case, a cashless claim will be rejected.

b. Pre-Existing Disease – Policy Tenure: There are certain pre-existing diseases that insurers approve for treatment. However, costs towards treating the same is approved post two years of continuous policy subscription. Now, if your cashless claim is raised prior to this time-frame, the same will be turned down.

Therefore, it will help to know the exemptions specified by the insurance company prior to taking up their plan. Also, there is a possibility of claim rejection if the information provided with regards to your pre-existing disease is insufficient. Hence, the information disclosed to your insurer should be as accurate and detailed as is possible.

When you go for an insurance policy, there is a “Sum Assured” ear-marked to your policy – whether it is a family floater or an individual health cover. The Sum Assured is the amount available to you/family (based on the plan) per annum. Now, if your Sum Assured is exhausted for a particular year, your cashless claim will not go through – if a part of your Sum Assured is available, the insurer might provide a reimbursement at a later stage.

Insurance firms often classify certain diseases/medical conditions as “not covered.” These are essentially diseases that are not covered and are referred to as Exclusions – in some cases, while a disease is covered, there is a waiting period for the same. Now, if you file a Cashless claim for one such disease/medical condition that is excluded, the same will not be honored.

Insurers take non-disclosure, partial disclosure and inaccurate disclosure of facts seriously. These could pertain to the proposer’s age, income, nature of the occupation, marital status (at the time of commencement of policy), smoking status (Smoker/Non-Smoker), ailments and pre-existing diseases, etc. In the event any information is found to be inaccurate, the insurer can at their discretion reject your claim.

In the event your Cashless claim is rejected for one of the reasons discussed above (or even otherwise), you can go for a reimbursement claim. Upon rejection of your cashless claim, you will need to immediately initiate the procedure for a reimbursement.

i. Notify your insurance company or the Third Party Administrator (TPA) about the hospitalization and subsequent rejection of cashless claim

ii. Obtain Reimbursement claim form – from Insurer website

iii. Submit the duly filled reimbursement form along with the required documents (hospital bills, investigative reports, discharge summary, etc.)

The first-step to avoid a cashless claim rejection is to know about your insurance policy; right at the time of purchase. compare insurance policies to understand what is on offer and choose a policy that best meets your requirements. Also, maintain a record of all documents – pre and post hospitalization expenses, hospitalization records, diagnostic tests, discharge summary, investigation reports, etc. These documents can come in handy in the event your insurer seeks clarifications.