To cover the high cost of healthcare – especially the hospitalisation cost in private hospitals – taking a health insurance cover has become a necessity, unless there is a comprehensive life-long cover from the employer. This is because, there are uncertainties involved regarding the need of hospitalisation and the cost of treatment, while the amount of health insurance premium – to cover the uncertainties – is certain and hence is manageable.
So, the sole aim of taking a health insurance plan is either to avail the benefit of cashless hospitalisation or to get the amount paid during hospitalisation reimbursed.
Hence, despite paying insurance premium regularly, if a claim is rejected by the insurer, the basic purpose of taking the insurance will be defeated.
So, it’s important for you to know the reasons why health insurance companies deny claims and how to avoid claim rejections.
Causes of rejection of cashless benefits
To avail cashless benefits, an insured person needs to –
Visit a network hospital: A network hospital is a hospital with which the insurance company has tie-up for providing cashless treatment to the insured persons.
In case a person had to visit a hospital outside the network for a genuine reason, he/she needs to pay the bill first and then get the amount reimbursed from the insurance company.
Intimate insurer before planned hospitalisation: For planned hospitalisation scheduled in advance for a surgery or treatment, the insured person needs to intimate the insurance company before hospitalisation and get the cashless limit sanctioned. The limit may be increased, if needed during hospitalisation.
In case of no prior intimation, the insured person may have to pay the bill first and get it reimbursed later.
Causes for outright rejection
A claim may only be admissible on fulfillment of set terms and conditions. Claims submitted in violation of the terms and conditions may led to rejections due to following technical reasons:
Period of Hospitalisation: A claim is admissible only in case of over 24 hours of hospitalisation for treatment purpose. Hospitalisation for diagnosis purposes is also not admissible.
Waiting Period: A claim is not admissible if the hospitalisation takes place within the waiting period after a policy is taken. As per the industry norms, the general waiting period is 6 months, while for some specific diseases – that set in slowly – the waiting period is longer.
Daycare Procedure: For some treatment like cataract operation etc, where 24 hours of hospitalisation is not needed, the claim will only be admitted when the treatment is there in the admissible daycare procedure list and the waiting period for the treatment is over.
Suppression of Material Facts
While rejections on the basis of technical reasons are case specific, a more serious reason is suppression of material facts while applying for a health insurance policy.
Following are some of such reasons for which claims may be rejected:
Pre-existing diseases: An applicant must reveal all the health conditions at the time of filling the application form with utmost care, so that no material facts are suppressed intentionally. Taking a health insurance policy by hiding the health problems – like having abnormalities in blood sugar level, blood pressure or any disease – may lead to rejection of claims related to the pre-existing diseases or abnormalities.
As per the Moratorium Clause, rejection on the ground of pre-existing diseases is not permitted after 8 continuous years from issuance of a policy. However, in case it’s proved that there is intentional suppression of material facts, claims may be rejected due to fraud even after 8 years.
Subsequent detection of health conditions: If abnormalities in health conditions – like abnormalities in blood sugar level, blood pressure etc or set in of any diseases – are detected even after taking the policy, the insured persons should reveal it to the insurance company immediately after the detection or at the time of renewal of the policy. Otherwise, there may be investigations at the time of raising claim requests, leading to even rejection of the claims.
Suppressing facts at the time of porting the policy: While porting a health insurance policy from one insurer to another, an insured person must reveal all the health conditions and abnormalities present on the date of porting the policy. Suppressing any conditions that come to light while the policy was under the previous insurer should also be revealed to the new insurer even if the previous insurer was not informed in the due course. Any intentional violation may be treated as fraud, leading to rejection of future claims.
So, it’s better not to port a policy, once the age of the policyholder becomes more than 50 years.
How to Avoid Claim Rejections
Technical reasons: To avoid rejections on technical grounds, ensure that all the terms and conditions are fulfilled at the time of hospitalisation or availing daycare procedures.
Suppression of facts: To avoid rejections on the more serious grounds of suppression of material facts, at the time of filling the application form, ensure that you understand the terminologies properly and fill the form with utmost care to ensure that no fact is suppressed intentionally.
Remember, revelation of true facts may lead to imposition of some loadings on premium, which would increase it a bit, or imposition of some exclusions leading to making claims related to pre-existing conditions inadmissible, or rejection of the application, but the claims would not be rejected after paying premiums year after year.