Cashless Health Insurance: Why and when your claim could be denied

Cashless health insurance is one of the main attractions of health insurance policies. Policyholders pay premiums and in case of hospitalization, the insurance company bears the costs up to the limit of the policy’s sum insured amount.

Hence, as part of the contract, the insurer is liable to pay the claim to the hospital on behalf of the insured. However, there can be times where the insurance company does not settle the policyholder’s claim. (Both at network or non-network hospitals).

Cashless Claims: In a cashless claim, the policyholder does not pay the hospital bills in case of hospitalization and the insurer pays for the same. This happens with networking hospitals. The hospitals that offer cashless claims for every hospitalization to the policyholder, enter into an agreement with insurers and are part of the list of network hospitals of that insurance company.

Reimbursement Claims: In case of a reimbursement claim, the policyholder has to pay the hospital bills, which then is reimbursed by the insurer. Those that are not on such a list of the insurance company are called non-network hospitals and claims are processed on a reimbursement basis.

When a cashless claim can be denied:

As a policyholder, know that even a cashless facility can be denied in a network hospital. This can happen if the information sent by the hospital where the policyholder is admitted, is insufficient. It could also happen if the illness is not covered under the policy or if the request for pre-authorization is not sent in time. The hospital needs to give all the details required for the insurer to arrive at a decision, in a cashless situation. When such pieces of information are not given properly, a claim is rejected.

However, even if the cashless facility is denied at one hospital, a policyholder gets the treatment from the hospital by paying out of his/her own pocket and can subsequently, submit the claim for reimbursement, on discharge from the hospital.

This could also work when in case of a medical emergency, a policyholder gets oneself or a family member admitted to a hospital which might not be a network hospital with the insurance policy. In that case, the cashless claim will be denied, but the policyholder can get the expenses reimbursed from the insurer.