Ayush hospitalisation and insurance: Why claims get rejected and how to improve your chances

Representative image

For many Indians, serious illness or chronic pain still sends them to an ayurvedic hospital rather than a modern multi-speciality facility. On paper, health insurance has caught up with this reality. Most standard policies now promise coverage for ayush treatments, including ayurveda, as long as you are admitted as an in-patient. Yet when the bill goes in, many families discover that

ayurvedic hospitalisation claims face more questions, more paperwork and more rejections than regular allopathic admissions. Understanding why this happens and how the rules actually work is the first step to avoiding nasty surprises.

Insurers like clear, standardised treatment protocols. Allopathic hospital bills usually fit that template. Ayurvedic hospitalisation, in contrast, often looks unfamiliar to claims teams. Packages are built around therapies, oils and panchakarma procedures rather than surgeries and scans. That alone makes internal reviewers more cautious. There are also structural reasons. Many policies still restrict ayush coverage to in patient care, with a minimum 24-hour admission, and only in recognised ayush hospitals. If the facility is more like a wellness retreat than a registered

hospital, or if the insurer decides that the stay was largely for rejuvenation rather than medical treatment, the claim can be questioned or denied.

Documentation standards also tend to be weaker in smaller ayurvedic centres, which gives companies an easy technical ground to push back.

On top of that, health insurance complaints of all kinds have risen sharply in recent years, with a large share involving delays or rejections linked to exclusions, pre-existing disease conditions and paperwork gaps. That background of rising disputes makes insurers even more defensive when a file looks unusual.

Regulators have, slowly but clearly, nudged the industry towards equal treatment of ayush and modern medicine. Health insurance regulations define ayush treatment as recognised systems such as ayurveda, yoga, naturopathy, unani, siddha and homeopathy, and allow insurers to cover them as per product design. A standard definition of an ayush hospital requires things like a qualified ayush doctor, in-patient facilities, a minimum bed count and proper maintenance of records.

In early 2024, insurers were told to have a board approved policy on ayush coverage, and to place such treatments at par with other forms of treatment for the purpose of health insurance. More recent discussions between the health ministry, the ayush ministry and the regulator have looked at benchmark rates and clearer claim settlement guidelines, precisely because demand and disputes have both increased.

Some popular standard products already show what parity looks like. The basic health cover that all companies must offer is required to cover in-patient ayush expenses up to the sum insured, as long as treatment is taken in an ayush hospital that meets the prescribed criteria. Covid standard policies also explicitly cover ayush hospitalisation for Covid treatment up to the insured amount.

On paper, then, the direction of policy is clear. The friction happens in how these rules are interpreted on the ground.

The first step is choosing the right facility. If you are planning a stay that you expect to claim under insurance, check whether the ayurvedic hospital is properly registered and, ideally, has the recommended accreditation or state level quality certification. A centre that looks like a spa will be a harder sell than a hospital that clearly functions as a medical institution.

Before admission, it is wise to read your policy wording or customer information sheet to confirm exactly what it says on ayush treatment. Look for conditions on minimum hours of hospitalisation, caps, and whether coverage is restricted to government or empanelled hospitals. If the insurer requires pre authorisation for planned ayush admissions, follow that process so that there is a

paper trail showing advance disclosure.

During the stay, insist on proper records. Make sure the hospital issues a clear admission note, daily progress entries, test reports where relevant and a discharge summary that states the diagnosis, treatment plan and procedures done. Bills should be itemised, with room charges, procedure costs and medicines shown separately. These are time consuming requests in a small ayurvedic set up, but they directly increase your chances of a clean claim.

After discharge, send all documents quickly, answer queries in writing and keep copies of every email or letter. Many genuine claims collapse simply because a time limit was missed or a clarification was given only over the phone.

Even with careful planning, some ayurvedic claims will be turned down. Here, process matters. Start by asking the insurer for a written repudiation letter that explains the exact clause under which the claim was rejected. If the reason is vague, such as saying the treatment was not necessary or the hospital was not appropriate, ask them to point to the clause in the policy that supports that

position.

If you believe the rejection is unfair or overly technical, use the insurer’s internal grievance redressal first. If that fails, you can escalate to the regulator’s grievance portal, the insurance ombudsman or, in stronger cases, a consumer court. Recent rulings have repeatedly held that insurers cannot use strained interpretations of rules to deny legitimate claims, and that ambiguous terms must be read in favour of the policyholder.

Ayurvedic hospitalisation is no longer outside the formal health insurance system, but it still lives in a grey area where old paperwork habits collide with new rules. Insurers push back partly because the treatments look different and partly because documentation is weak. Policyholders, on the other hand, assume that a broad promise of ayush cover means any traditional therapy at any centre

will be paid.

The safest path lies in the middle. Choose a proper ayurvedic hospital, know exactly what your policy says, treat documentation as seriously as you would in a large private hospital and be prepared to push back calmly if your claim is rejected on shaky grounds. With that preparation, ayurvedic care and health insurance can work together rather than against each other.