Even with health insurance, many Indians are caught off guard at claim time, unsure if the bill will be settled directly or if they’ll have to pay first and chase reimbursement later. At Ditto, we see this confusion daily: in FY 2024–25 alone, our advisorrs helped track and resolve hundreds of claims across both cashless and reimbursement modes.

For this article, we reviewed policy wordings from leading insurers, IRDAI claim guidelines, and Ditto’s own claim support cases. This mix of regulatory data and real-world claim experience helps us cut through jargon and show you exactly how both processes play out in practice.

By the end, you’ll know the key differences between cashless vs reimbursement claims, when each applies, and how to avoid nasty surprises like out-of-pocket costs or rejected bills.

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How Do Cashless Claims Work?

A cashless claim allows you to avail medical treatment at a network hospital without having to settle the bill yourself at the time of discharge. Your insurance company directly settles the eligible expenses with the hospital, subject to policy terms.

Here’s how cashless claims work:

    • You choose a hospital from the insurer’s network.
    • Present your health insurance card or policy details at the hospital.
    • Pre-authorization is required for planned treatment (usually 24-48 hours before admission per IRDAI’s Master Circular).
    • For emergencies, inform the insurer within 24 hours of hospitalization.
    • The Third Party Administrator (TPA) or insurer processes and approves the claim.
    • The hospital bills are settled directly by the insurer, and you pay only for non-covered expenses or copayments.

Do I Need to Make Payments If My Treatment is Covered Under Cashless Hospitalization?

Even if your insurer approves a cashless claim, you may still need to pay certain expenses out of pocket. This happens because policies come with internal limits and exclusions. The most common ones are:

    • Room-rent or package upgrades
      If your policy assumes a shared room (say, ₹4,000/day) but you choose a higher category, the insurer applies proportionate deduction. That means you pay the difference not just on room rent, but also on all linked services like doctor visits, nursing, OT charges, and diagnostics.
    • Sub-limits, co-payments, and deductibles
      Examples include a ₹50,000 maternity cap, ₹25,000 cataract cap per eye, 10% co-pay for metro treatment, or a voluntary ₹10,000 deductible. Any amount above these caps is your responsibility—even if your overall sum insured is still available.
    • Exceeding the pre-authorised or package cost
      For planned procedures, hospitals seek pre-approval (say, ₹1.20 lakh). If the final bill comes to ₹1.35 lakh and the insurer doesn’t see medical justification for the extra ₹15,000, you’ll need to settle that difference.
    • Security deposit at admission
      Many hospitals ask for a security deposit of around ₹10,000–₹50,000 before or during admission. This isn’t mandated by insurers; it’s a hospital practice to safeguard against pre-authorization delays, non-covered consumables, or possible claim rejections. The deposit is later adjusted against your final bill, and any balance is refunded once the insurer settles their share.
    • Non-medical consumables
      Most base health policies exclude items like syringes, gloves, admission kits, visitor-pass charges, and medical-records fees. These can add up to 5–10% of the bill, unless your plan includes a consumables add-on. 

But worry not! You can still file a reimbursement claim for these expenses provided they are covered under the insurer’s terms and conditions.

At Ditto, we require insurers to clearly explain exclusions. If their explanation doesn’t hold up, we escalate the issue on your behalf.

Now let’s look at reimbursement claims, starting with how they work.

How Do Reimbursement Claims Work?

A reimbursement claim requires you to pay the entire bill out of pocket and then file a claim with the insurance company to get the amount reimbursed later. This can be used at any hospital, regardless of whether it is in your insurer's network.

A quick look at how reimbursement claims work:

    • Get treated at any hospital of your choice.
    • Settle the full bill yourself at the time of discharge.
    • Collect all original documents, bills, prescriptions, diagnostic reports, discharge summary, and a filled claim form.
    • Submit these documents to the insurer after discharge, within 30 days.
    • The insurer reviews and settles the claim as per policy norms. Reimbursement usually takes 15–30 days upon submission of all required documents. For example, HDFC ERGO’s Optima Secure policy wording requires the insurer to “settle or reject a claim” within 15 days of receipt of intimation (Claim Settlement, Section 1.3). The policy also sets the submission deadlines for reimbursement claims.
Did You Know?

Paying even a single rupee at the hospital defeats the point of “cashless” health insurance, yet 6 out of 10 claims we track at Ditto still go through reimbursement.
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When Does Reimbursement Become the Only Claim Option? 

If you receive treatment at a hospital not in the insurer’s network, reimbursement becomes the only route. The following situations can also require insurers to opt for reimbursement: 

    • High-Value Claims with Unclear Medical History: Let’s say a person wants to undergo cardiac surgery costing ₹8 lakh, just three days after their first hospital visit for mild chest pain. This sudden diagnosis may lead the insurer to opt for reimbursement, especially with no prior consultations or tests. 
    • Suspected Pre-existing Conditions: A patient is admitted for kidney failure, and tests reveal damage consistent with long-term, undiagnosed diabetes. Since diabetes is a common cause of kidney issues and may have existed before the policy began, the insurer flags it for possible pre-existing conditions and moves it to reimbursement mode for review.
    • Specific Medical Documents: A policyholder claims Stage 4 cancer treatment six months after buying a policy, with no prior medical records of symptoms. Since advanced cancers usually develop over years, the insurer suspects it started before the policy and moves the claim to reimbursement mode for further checks.
A not-so-common option is the Cashless Everywhere Scheme.

It lets you request cashless treatment at non-network hospitals, subject to the insurer’s approval and the hospital’s willingness to process cashless claims. It is not a blanket guarantee. If the request is not approved, you still use reimbursement.

To learn more, check this guide.

What Are the Differences Between Cashless and Reimbursement Claims?

Feature Cashless Claim Reimbursement Claim
Hospital Selection Only network hospitals Any hospital (except excluded ones)
Upfront Payment Minimal (only non-covered expenses) Full bill to be paid by policyholder
Paperwork Minimal (health card, ID, online form) Extensive (all original bills, reports, forms)
Claim Settlement Time Faster, usually before discharge Slower, up to 30 days after document submission
Pre-authorization Required for planned treatments Not required, but intimation necessary
Convenience Highly convenient, especially in emergencies Less convenient due to finance and paperwork
Financial Burden Low during hospitalization High during hospitalization, eased after settlement

Bottom Line: At Ditto, our advisors consider cashless as the ideal option because its benefits match the very reasons people choose health insurance in the first place.

Why Talk to Ditto for Your Health Insurance?

At Ditto, we’ve assisted over 5,00,000 customers with choosing the right insurance policy. Why customers like Sakshi below love us:

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Cashless vs Reimbursement: Key Takeaways

Cashless claims give quick financial help at covered hospitals, while reimbursement claims let you choose any hospital but involve more paperwork and slower payments. You can choose the option that best suits your needs and hospital choice by considering the following: 

    • Always check the list of network hospitals before planning a procedure.
    • Carry your health insurance card and valid ID.
    • Read your policy document for exclusions and non-payable items.
    • In reimbursement claims, keep every document and receipt safe until the process is complete.
    • Keep track of claims through insurer or TPA portals.

From buying a policy to making a claim, Ditto has your back. Our dedicated claims team is here to guide you at every step. For any claim-related queries, call us at 080‑4881‑6818.

FAQs

Are pre- and post-hospitalization expenses covered in both methods?

Pre- and post-hospitalization expenses are primarily covered under the reimbursement process, as you pay for these costs upfront and claim them later. Nowaways, several insurers also provide post-hospitalization expenses under cashless schemes in certain network hospitals.

What happens if a network hospital denies cashless claims?

You can still go ahead with the treatment by paying the bills yourself and filing a reimbursement claim later. Cashless denial happens if the insurer finds issues like early claims, suspicion of non-disclosure of medical history, or doubts about foul play or fraudulent intent.

Can I Use Cashless Claims for Two Insurers at Once?

Cashless claims are generally processed by only one insurer at a time. The second insurer can be approached for the remaining payable amount through reimbursement after the hospital bill is settled.

What Happens to My Claim if I Get Treated at a Blacklisted Hospital?

Your claim will be outright rejected! You won’t be able to use cashless facilities or get reimbursement for treatment taken at the blacklisted hospital. Most insurers mention these excluded lists of hospitals on their websites. So, make sure to check the list before choosing a hospital for treatment.

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