Indian Reasons as to Why Health Insurance Claims are Rejected
In India, health insurance is extremely vital since it gives essential financial security against medical emergencies. Yet, the process of going through claims may be a complicated one, particularly in case of rejections. The reasons as to why your health insurance claims are rejected may assist you in preventing the traps and make sure that your claims are accepted.
As part of this detailed guide, we have deconstructed the most frequent causes of claim denials, what to do to prevent them, and personal advice of experts on a trouble-free claim process.
What is the Health Insurance Claim Rejection?
The situation where your insurance company refuses to pay or compensate medical expenses received is called a health insurance claim rejection. This normally occurs when your claim does not match with the terms and conditions of your policy.
IRDAI Insight:
During the year 2021, the Insurance Regulatory and Development Authority of India (IRDAI) ranked the health insurance claim rejection rate in India as 5 percent to 10 percent. Majority of the rejections are caused by mistakes or negligence that can be avoided.
The Best Reasons Why Health Insurance Claims are Rejected
1. Inadequate Documentation or Improper Documentation
The failure to submit the required documents as well as the provision of inaccurate information is one of the most popular causes of rejections.
To be avoided:
- Present bills, prescriptions, discharge summaries and identification certificates.
- Check policy number, name, date of admission etc personally.
2. Policy Exclusions
Every insurance policy has an exclusion when there are certain specified conditions or treatments that are not covered in the plan.
Common Exclusions:
- Cosmetic surgeries
- Treatments to the teeth (not in case of an accident)
- Alcohol or smoking lifestyle diseases (not described specifically)
- Basic plans provide maternity costs (in basic plans)
Tip: First, read the wording of your policy to determine what is not covered.
3. Pre-Existing Conditions Non-Disclosure
Not mentioning pre-existing issues (e.g. diabetes, hypertension) at the time of buying the policy may result in an outright denial of claims.
Impact: When such conditions are involved, there is a likelihood of an insurer applying a waiting period (2-4 years).
Pro Tip: Never conceal medical history or it might complicate the situation in the future.
4. Non-Network Hospital Treatment
The denial of cashless claims may be faced in case the treatment is taken in a non-partnered hospital because it is not a network partner of the insurer.
5. Delayed Intimation
Failure to notify the insurer in the required time of hospitalization (typically in a range of 24-48 hours) may lead to the rejection of claims.
Insider Tip: Do not forget to notify your insurer on a timely basis, even during an emergency.
The Way to Avoid a Claim Rejection: Step-by-Step Advice
Proper Documentation
- Store all bills, prescriptions and diagnostic reports.
- The hospital should stamp and sign them.
Deliver on Promptness
- Never fall behind in deadlines. The majority of insurers want claims to be made between 7 and 30 days after treatment.
Learn Your Policy
- Learn what is included, excluded, and waiting periods of your insurance and how you can claim.
- Misunderstandings should be clarified with the insurance company in time.
What is the Process by Insurance Companies to Assess Claims?
| Step | Process Evaluation |
|---|---|
| 1. | IC Verification - Making sure that all the papers are valid and complete |
| 2. | Policy Check - Is the treatment covered in your policy terms? |
| 3. | Medical Necessity - Did the treatment have to be medically necessary? |
| 4. | Fraud Detection - Conduct a check regarding misrepresentation or false claims |
Insider Tip: Stay in touch with your insurer as you go through the claim process to ensure you give clarifications in due time.
So What Happens When Your Claim is Refused?
Don’t panic. It is possible to challenge a denied claim.
What to Do When a Claim is Rejected?
- Learn to Read the Rejection: Go through the rejection letter slowly.
- Obtain Supporting Documents: Provide missing or extra documents.
- Write an Appeal Letter: Provide the reasons as to why the claim is true using evidence.
- Presentation to the Insurer: This should be within a time frame; typically 15-30 days.
Did You Know? Once enough documents are furnished to support the claims, many of them are granted after an appeal.
Less Publicised Causes of Rejection of Claims
Some of them are clear, and some of them are less popular, although very important:
- Secretive Practices: Non-disclosure of such habits as smoking or drinking alcohol.
- Wrong Diagnosis Codes: Mispreading of medical codes by hospitals.
- Overstepping Policy Limits: Making a claim exceeding allowance of your policy covers (e.g. rent limit on room).
- Modification of Policy Term: Where terms are changed which are not communicated and understood.
Ways of Selecting the Appropriate Insurance to Reduce the Risk of Rejection
| Factor | The Importance Of |
|---|---|
| Coverage | It should fit your medical needs (e.g. pre-existing conditions, maternity) |
| Network Hospitals | Make sure that your favored hospitals are listed |
| Claim Settlement Ratio | Select insurers having the ratio of >95 % to be more reliable |
| Customer Reviews | Check customer reviews on claim experience |
Where to Check Claim Ratio? Go to the official website of IRDAI or read the annual report of your insurer.
FAQs People Also Ask
What is the reason behind rejection of health insurance claims?
As a result of incomplete documentation, failure to declare pre-existing conditions and policy exclusions.
Is it possible to appeal against a rejected claim?
Yes, you should present the required papers together with a written explanation to your insurers.
What is the turn-around time of a claim?
Between 15-30 days depending on the insurer and complexity of the given case.
Is there any punishment for false claims?
Indeed, false statements may result in cancellation of policy and legal proceedings.
Is dental treatment covered under a health insurance?
It can only be covered under the circumstances of an accident, or in particular as covered under a dental rider or policy.
Do outpatient treatments (OPD) get covered?
There are plans that cover OPD. Look at your policy or enquire with your insurer.
Conclusion
Knowing what causes health insurance claims to be denied is important in case you want to make sure your policy will not fail at the most critical moment. The difference between approval and rejection can be avoided by taking care of common mistakes such as incomplete paperwork, non-disclosures and lack of understanding of your policy.
Final Tips:
- Be conversant with your policy.
- Maintain close medical records.
- Give out all the truth.
- Make sure you communicate with your insurer.
Stay informed. Stay insured. And be stress-free when it counts the most.