Demystifying cashless health insurance: How to prevent claim rejection

Concealing pre-existing illnesses can lead to claim disputes

In recent years, cashless health insurance has emerged as a crucial lifeline for policyholders. It acts as a boon for procedures involving high costs and in emergency situations where immediate treatment is necessary. The cashless facility offers great financial security by directly covering medical expenses, thereby reducing the immediate financial burden on families.

However, if this benefit is unavailable when needed, it can leave one feeling disappointed or frustrated. You may have heard of cases where despite having opted for the cashless facility, policyholders end up paying a part of or the entire amount of the hospitalisation expenses from their pockets. The underlying reasons for such instances are typically found within the intricate details of the policy terms and conditions, emphasising the need for careful consideration at the time of policy purchase.

Also read: New health insurance claims rule: Shorter wait for pre-existing illnesses, no disputes after five years of policy coverage

To gain a deeper insight into this matter, let's explore the various reasons and scenarios that could contribute to the delays or rejections of a cashless request:

Non-disclosure of pre-existing diseases (PED)

This is one of the most common reasons for rejection of a cashless claim. Existence of pre-diseases such as diabetes, hypertension and/or thyroids is a key factor impacting premium, waiting period and other terms of a health policy, and hence it is necessary that any form of PED is disclosed while buying the policy. Ensure that it is printed on the policy copy as information. Hospitalisation resulting from an illness associated with an undisclosed pre-existing condition often leads to delay and subsequent cashless claim rejection.

Non-disclosure of lifestyle conditions

Not revealing other important information like lifestyle conditions while buying the policy can also lead to claim rejection. For e.g. non-disclosure of alcohol consumption at the time of policy purchase can lead to rejection of cashless claim for hospitalisation due to liver-related illnesses.

Hence, while buying the policy, customers should accurately disclose all necessary facts in the proposal form. Any missed or incorrect information may adversely affect the admissibility of a cashless claim and may lead to disappointment.

Hospitalisation for a disclosed pre-existing condition during the waiting period can lead to a cashless claim rejection. For instance, if you have diabetes and are hospitalised for kidney failure within the PED waiting period, your claim may be denied as it may be considered a complication arising out of diabetes, which may not be covered during the PED waiting period.

Sub-limits and exclusions

Sub-limit or exclusions can play a part in claim rejection or partial payment. A sub-limit is the maximum monetary cover extended for a particular ailment. Customers should read the policy documents carefully to understand those specific conditions that have sub-limits and the amount that is capped against these conditions. Any claim made for a health condition that is excluded under the insurance cover, is rejected by the insurer. Therefore, it is of utmost importance to understand the inclusions and exclusions under the policy.

Understand the policy terms and conditions

While it's essential to keep the above points in mind when purchasing a policy, it's equally important to follow all policy terms and conditions during the hospitalisation process. Failure to do so can result in delays, partial approvals, or even rejection of cashless claims:

• Preauthorisation documents including health card, photo ID, doctor prescription, treatment estimate, pre-authorisation form etc. are mandatory. Their absence may result in queries from the insurance company and delays in approvals.
• Discrepancies in medical documentation, such as incomplete or inconsistent reports, can raise red flags and lead to queries and rejection of cashless claims.
• Exceeding the room rent limit may lead to proportionate deduction during the final approval. Customers should know their policy's limits to avoid any surprises. Generally, it is either one percent to 1.5 percent of the sum insured for a single private room. It varies from policy to policy; in some policies there may not be any room rent limit.
• Non-payables, items not covered by the insurance should be understood to avoid confusion during discharge.
• Choice of hospital matters as cashless facility is available only in network hospitals. However, insurers have now started offering cashless facilities in non-network hospitals, thereby allowing cashless treatment at almost any hospital subject to certain conditions..

As per our estimates, approximately 58 percent of claims are processed through cashless facilities. However, it's noteworthy that one in every fourteen cashless claims faces rejection. To mitigate this risk, implementing straightforward strategies can be beneficial:

1. Policy interpretation: Review and understand your policy terms to avoid misinterpretation. To make it convenient for customers, insurers have set up multiple communication options that are available round the clock. Moreover, insurers send across a ‘Customer Information Sheet’ (CIS) to their policyholders which explains the policy terms and conditions in simple words.
2. Complete disclosure: Provide accurate information about your health and habits during policy application.
3. Timely pre-authorisation: Obtain pre-authorisation at least two days in advance for planned medical procedures. This may help you address any queries/requirement from the insurers well in advance.
4. Document verification: Ensure all claim documents are accurate and complete.
5. Network hospital selection: Keep the list of network hospitals handy and seek treatment at network hospitals to leverage cashless facilities or apply for cashless in non-network hospitals as per the conditions laid down by the insurers.
6. Blacklisted hospitals: Certain hospitals may be blacklisted by the insurer, from where no cashless or reimbursement claim is entertained. You may like to check any such list available on your insurer’s website to prevent this situation.

By understanding the reasons for cashless claim rejection and implementing effective mitigation strategies, policyholders can navigate the complexities of health insurance with confidence and ensure timely access to quality healthcare services.