A health insurance claim is a formal request made to your insurer to cover medical expenses as per the terms and conditions of your health insurance plan. You can raise a claim either as a cashless claim at a network hospital or as a reimbursement claim after paying medical bills upfront.
The process begins when you file the claim with your insurance provider, submitting all required documents such as medical records, bills, and the claim form. Once the insurer reviews your documentation, it initiates claim processing. If everything complies with the policy terms, the claim settlement is made by paying the hospital directly or reimbursing you.
However, understanding health insurance is crucial here. Even minor errors can lead to claim rejection, leaving you to manage medical expenses on your own.
This article looks into 5 important reasons your health insurance claim could be rejected and some practical measures you can take to avoid such instances.
1. Inadequate or Wrong Documentation
Incorrect or inadequate documentation is one of the most frequent reasons for claim rejection. Several documents are required by the insurer to settle a claim, e.g., hospital bills, diagnostic reports, doctor’s prescriptions, discharge summaries, and a properly filled claim form. Missing, illegible, or improperly filled documents can cause delay or claim denial.
In most instances, inconsistencies in data, like disparate patient names, wrong policy numbers, or treatment dates that do not align with admission records, may raise red flags for fraud or lead to outright denial.
How to Prevent It:
- Verify all forms prior to submission.
- Have the treating doctor or hospital staff complete entries like diagnosis and treatment legibly.
- Have a checklist of documents to be filed (most insurers make this available on their websites).
- Provide photocopies of originals unless asked for originals in specific cases.
2. Claim Raised for Excluded Treatments
Each health insurance policy has a set of exclusions—diseases and procedures not covered. Such exclusions include cosmetic procedures, dental care (except as a result of an accident), fertility treatments, and certain pre-existing illnesses until the waiting period is over. If the policyholder makes a claim for any such treatment, the insurer can rightly decline the claim.
Furthermore, certain treatments are reimbursed only after a particular waiting period, usually 1 to 4 years. For example, if a claim is filed for cataract surgery during the initial year of the policy and it is subject to a two-year waiting period, the claim will most probably be denied.
How to Avoid It:
- Carefully read the policy document, particularly the exclusion part.
- Identify the waiting period clauses and monitor their fulfillment.
- Check with your third-party administrator (TPA) or insurer in case of uncertainty before seeking treatment.
- Renew your policy timely to prevent waiting periods from being reset.
3. Policy Lapse or Non-Disclosure of Pre-existing Conditions
Pre-existing health conditions are ailments that existed before buying the policy. These are often excluded from coverage for a certain waiting period, generally ranging from 1 to 4 years, depending on the health insurance provider.
Numerous people gloss over or avoid mentioning prior ailments or operations to save on premiums. Insurers can, however, see your medical records, and if they find you have been guilty of non-disclosure, your claim can be denied for violation of trust.
Many policyholders get rejected because they overlook the fine print. Each health insurance plan comes with a detailed list of terms and conditions that govern what is covered and what is not.
Key areas to focus on include the sum insured, waiting period, exclusions, and claim settlement process. Ignoring these can lead to unmet expectations and rejection at the time of need.
Under the Insurance Regulatory and Development Authority of India (IRDAI), the insurers can reject a claim in case material facts were deliberately misrepresented or concealed.
Take the following steps to avoid such problems:
- Renew your policy well before the expiry date. Choose automatic reminders or standing instructions.
- Honestly declare your complete medical history, even if this means paying a marginally higher premium.
- Maintain records of medical tests and disclosure provided at policy initiation time.
- If you change carriers under portability, ensure proper sharing of all health information.
4. Hospital Not in Network or Non-Medically Necessary Admission
Indian health insurers typically have a panel of hospitals that provide cashless treatment. If you are taken to a non-panel hospital, you will have to pay upfront and subsequently claim reimbursement. Some hospitals, however, might not be empanelled by the insurer or may fail to supply proper documentation. Even for legitimate illnesses, such claims can be rejected in these cases.
In addition, admissions without a genuine medical need (e.g., overnight stay for tests that can be carried out as outpatient procedures) are routinely flagged and refused. Insurance pays for treatments that are medically necessary and not convenience treatments.
Preventive steps:
- Make use of the insurer’s hospital list online to check network hospitals prior to admission.
- Call the insurer’s call centre prior to planned procedures to check the status of the hospital.
- Obtain a doctor’s written referral stating the reason for hospitalisation.
- Document emergency admissions, e.g., ambulance charges or ER reports.
5. Delay in Claim Intimation or Filing
Prompt communication is important when making a claim. It is often mandatory that the policyholder or the hospital informs the company within 24 to 48 hours of admission in case of emergency hospitalisation. In the case of planned surgery, intimation has to be made at least 48 to 72 hours before the time. A delay after this can lead to a claim being deemed non-admissible.
Likewise, for claims of reimbursement, the insurer also puts a strict timeline, usually 15 to 30 days after discharge, to submit all necessary documents. Noncompliance can result in flat rejection. You can avoid rejections based on delays by taking the following steps beforehand:
- For scheduled procedures, notify the insurer at the earliest when the admission is planned.
- In case of emergencies, make sure that a family member calls the insurer or TPA promptly.
- Keep a personal file containing all documents and receipts to simplify the process of reimbursement.
- Utilise online claim submission facilities provided by insurers to minimise delays caused by postal or courier-based submissions.
Tips in Practice to Maximise Claim Acceptance
In addition to resolving the above points, some more practical tips to increase your success rate in making a successful health insurance claim are as follows:
Know Your Policy Coverage: Have a digital and physical copy of your policy with you. Review coverage limits, room rent cap, co-pay provisions, and sub-limits on certain treatments.
Pre-Authorisation for Cashless Claims: For cashless hospitalisation, always get pre-authorisation sanctioned by the insurer prior to admission (excluding emergencies). This will provide you with an idea of how much would be paid.
Have Insurer Contact Ready: Always keep your insurer’s or TPA’s customer care number handy in your mobile. Prompt communication frequently averts complications.
Retain All Bills and Reports: Don’t throw away any report, test report, or bill, no matter how minor it may look. Every sheet of paper assists in building a medical history that corroborates your claim.
Follow Up Regularly: After submission, don’t assume everything is progressing smoothly. Follow up every few days and ask for acknowledgement of submitted documents.
Final Thoughts
Health insurance is a vital financial safety net, but it demands active participation from the policyholder. Denied claims are frequently the direct result of avoidable errors or miscommunications. Being informed, meticulous with paperwork, and communicative with your insurer can help you substantially lower the chances of claim denial.
The main lesson is easy to understand: know your policy back to front and be organised when things are most important. Well-managed claim not only protects your finances in times of medical crisis but also reinforce your long-term faith in your insurer.
