You have been at the hospital for a couple of days and now that you are fit, ready to go home. The doctor comes on a round in the afternoon and declares you fit for the discharge. You pack your bags as you will finally be able to go home but then the hospital staff tells you to wait for some more time. You can see your family members running around and making thousands of calls to get the bills cleared. The clock touches 7'o clock in the evening and you are still stuck in the hospital as your health insurance claim has not been cleared. The hospital will not discharge you unless the insurer signs off on the bills. If it takes a few more hours, you may have to spend another night at the hospital and it will increase your hospital bill as well. Well, this is not an aberration.
Delays in settling health insurance claims by insurance companies or third-party administrators (TPAs) — intermediaries between insurance companies, the insured, and hospitals have often become a nightmare for patients and their families. According to a survey by Local Circles, "In several cases cited by policyholders on LocalCircles, it took 10-12 hours after the patient was ready for discharge for them to get discharged because the health insurance claim was still getting processed. If they stay back at the hospital another day to do so, the cost of that additional night's stay has to be borne by them. According to several patients, this is the experience where the insurance company has already provided a pre-approval to the hospital's TPA desk before admission of the patient."
This is where the new rule in health insurance claim process by IRDA is going to help policyholders in the most crucial stage.
IRDAI sets a time limit for approving cashless claims
To change this cumbersome experience for health insurance policyholders, the Insurance Regulatory and Development Authority of India (IRDAI) has said that the insurer must grant the final authorisation within three hours of receiving the receipt of the discharge request from the hospital."In no case, the policyholder shall be made to wait to be discharged from the hospital," the regulator said in a master circular dated May 29, 2024.
IRDAI said, "If there is any delay beyond three hours, the additional amount if any charged by the hospital shall be borne by the insurer from shareholder’s fund."
The regulator added that in the event of the death of the policyholder during the treatment, the insurer will:
i) Immediately process the request for claim settlement.
ii) Get the mortal remains (dead body) released from the hospital immediately
100% cashless: IRDAI asks insurers to decide on cashless claims within one hour
Further, the regulator asked the insurers to strive to achieve 100% cashless claim settlement in a time-bound manner. In emergency cases, the insurer should decide on the request for cashless authorisation immediately, within one hour of receiving the request. IRDAI also asked insurers to put necessary producers in place immediately by July 31, 2024, to achieve this goal. The insurers may arrange for dedicated help desks in physical mode at the hospital to deal with and assist with the cashless requests.
Moreover, the regulator also asked the insurers to provide pre-authorisation process to the policyholder through digital mode. Pre-authorisation usually means an initial amount has been sanctioned by the insurer along with an acknowledgment that the claim will be paid subject to final invoice received from the hospital.
On how to settle health insurance claims, the regulator says, "No claim will be repudiated without the approval of PMC or a three-member sub-group of PMC called the Claims Review Committee (CRC). In case, the claim is repudiated or disallowed partially, details shall be conveyed to the claimant along with full details giving reference to the specific terms and conditions of the policy document."
Diverse range of products for health insurance customers, how to use multiple health insurance policy
Further, IRDAI said that a diverse range of insurance products will be available for all ages, regions, occupations, medical conditions/treatments, and all types of hospitals and healthcare providers to choose from based on the affordability of the customers.
Narendra Bharindwal - Vice President, Insurance Brokers Association of India says, "Policies must be portable and underwriting policy should not discriminate against any particular group. The goal is to maintain high standards of customer service, ensuring an environment of trust and transparency in health insurance."
A policyholder can file for claim settlement as per his/her choice under any policy. The Insurer of that chosen policy shall be treated as the primary Insurer.
Policyholders who have multiple health insurance policies will get an option to choose which one they want to use to settle claims. The primary insurer with whom the claim is first submitted needs to coordinate and facilitate settlement of the balance amount from the other insurers, the regulator said in the master circular. If there is no claim during the policy period, the insurer may reward the policyholders with an option of no claim bonus either by increasing the sum insured or discounting the premium amount.
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