Cashless and Reimbursement Claims in Health Insurance

We all know that a good health insurance policy is a financial tool that provides stability during a medical emergency. During hospitalisation, the last thing you want to worry about is how your medical bills will be covered.

With a good health insurance policy, you can access top-notch health care – including hospital stays, surgeries, medications, etc. at a fraction of the cost.

Whether a sudden hospitalisation or a planned procedure, a good health insurance policy offers peace of mind that the insurer will settle the claim.

But how does an insurer settle a claim?

Types of Claims - Cashless and Reimbursement

Well, there are two main types – cashless and reimbursement. Let's explore this in detail now!

Cashless Claim Settlements

Cashless claim settlements allow you to get treatment at network hospitals without paying cash upfront or after the treatment. The hospital will directly bill the insurer, and they will settle it without you having to pay from your pocket.

Opting for a cashless claim procedure is much faster, easier, and requires less documentation. The trick is to choose an insurer that covers this without hassle.

However, this can only be claimed in-network hospitals, for the foreseeable future. The government is working on bringing this facility to non-network hospitals, but it would take quite some time to materialise.

Example - Rajesh has a health insurance plan provided by one of the leading insurers in India, with several hospitals in its network. One day, he experienced sudden chest pain and was rushed to the nearest hospital.

He underwent a series of diagnostic tests, revealing the need for an immediate angioplasty.

His family presented his health insurance card to the hospital help desk and requested a cashless claim settlement. The hospital, being part of the insurer's network, intimated to the insurer about Rajesh’s unexpected hospitalisation and the treatment he underwent within 24 hours.

The hospital directly communicated with the insurer, and the medical bill was easily settled. This allowed Rajesh to focus solely on his recovery without worrying about the expenses.

Claim Procedure

1. In case of a planned hospitalisation, inform your insurer at least 2 days in advance.
2. In case of an unplanned emergency, inform your insurer within 24 hours of hospitalisation. Sometimes, the hospital will inform the insurer themselves.
3. The insurer will coordinate with the hospital and pre-authorise a limit to which the bills will be covered.

Reimbursement Claim Settlement

During a cashless claim process, the insurer settles the bill directly with the hospital. It is straightforward, and you do not need to worry about filling out forms, submitting documents, and liaising with the insurer. However, one drawback is that it is available only to hospitals in the insurer’s network.

What if a hospital is not in the insurer’s network?

Well, this is where reimbursement claims come into play.

Unlike cashless claims, reimbursement claim settlements are a process where you pay for the hospitalisation out of pocket and then get reimbursed. You must settle the bills and submit the relevant documents to your insurer for reimbursement.

Even though reimbursement claims involve a longer process and require more documentation, one advantage here is that you can avail treatment at any hospital, as long as your insurer does not blacklist it.

Example - Amit needed emergency surgery after a horrible road accident. He was taken to a nearby hospital, which was not part of his insurer's network. After undergoing surgery and receiving treatment, Amit had to pay the hospital bills out of pocket.

After paying, he collected all the necessary documents from the hospital, including medical reports, bills, payment receipts, discharge summary, etc. He then submitted these documents and the reimbursement claim form to his insurer.

After reviewing the documents, his insurer processed the claim and reimbursed him for the medical expenses he had incurred during his treatment, minus any deductible or co-payment as per his policy terms.

Claim Procedure

1. In case of a planned hospitalisation, inform your insurer at least 2 days in advance.
2. In case of an unplanned emergency, inform your insurer within 24 hours of hospitalisation.
3. Keep all the original bills, medical reports, discharge summaries, etc.
4. Log in to your insurer’s website or app and complete the reimbursement form. If necessary, inform your insurance broker as well.
5. Submit the claim form within the specified timeframe mentioned in your insurance policy.
6. Once the claim is processed, you will receive a reimbursement for the eligible expenses during your hospitalisation.

Partial Cashless Settlement

In some cases, the insurer may approve a sum up to which they will settle immediately on a cashless basis. The insurers will pre-approve an amount based on your sum insured and the average treatment cost in that city.

If the entire cost for the treatment is within this amount, the insurer will settle the whole bill directly with the hospital on a cashless basis. But if the treatment costs exceed this amount, the policyholder must pay the excess amount to the hospital first and the insurer will reimburse them.

Example - Priya, a policyholder with comprehensive health insurance coverage, was admitted to a hospital for a planned surgery. The hospital she chose was within her insurer's network, enabling her to avail cashless claim benefits.

Before Priya's surgery, her insurer pre-authorised a specific amount to cover the anticipated medical expenses associated with the procedure.

Unforeseen complications arose during the surgery, requiring additional procedures and extending Priya's hospital stay. As a result, the total cost of treatment exceeded the pre-authorized limit set by the insurer.

In this scenario, the expenses covered by the pre-authorization were settled between the insurer and the hospital, but Priya had to pay the excess amount upfront to the hospital.

The insurer then verified the additional claim and reimbursed Priya for that amount.

Claim Procedure

1. Inform your insurer about a planned hospitalisation at least 2 days in advance, providing details of the treatment and estimated expenses. For emergency hospitalisations, notify your insurer within 24 hours of admission or as soon as possible (whichever is earlier).
2. The insurer will coordinate with the hospital to pre-authorize a limit for partial cashless settlement.
3. If the limit is exceeded, the policyholder must pay the remainder and get it reimbursed by the insurer.
4. Log in to your insurer’s website or app to fill out any required forms for reimbursement of the excess amount paid.
5. Submit the reimbursement claim form and supporting documents within your policy's specified timeframe.
6. Once the claim is processed, you will receive reimbursement for the eligible excess expenses incurred during your hospitalisation.

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Conclusion

You can settle health insurance claims in two main ways - cashless and reimbursement. Cashless claims allow you to receive treatment at network hospitals without any upfront payment, as the insurer directly settles the bill with the hospital. On the other hand, for reimbursement claims, you need to pay the treatment cost upfront and submit the documents to the insurer for reimbursement.

Although cashless claims offer convenience, you can avail it only at network hospitals. Whereas you can make reimbursement claims at any hospital as long as it is not blacklisted by your insurer.