5 things to know about cashless claims
Even the thought of the word hospital makes our pocket feel lighter, let alone disrupt our financial stability, health insurance is a critical aspect of any financial plan but has often been neglected by most of us.
In the event of hospitalization, apart from the emotional sufferings caused, financial instability can put most of us in a state of mental trauma. And with medical costs increasing at a rate faster than the headline inflation, having an adequate health insurance policy is the only way out. It can certainly lower your financial burden which otherwise could deeply impact your life savings.
Health Insurance not only provides you with a reliable cushion to fall back on during difficult times of health emergencies but also gives you tax benefits under Section 80D of the Income Tax Act, 1961.
Did you know this?
Well yes, you can claim deductions up to ₹100,000 depending on the type and number of family members covered under the policy.
While Health Insurance covers most of your Hospitalization expenses, you need to consider the fact that you might be asked to pay out of your pockets. And this might create a burden on any person with limited cash reserves as we discussed earlier.
Is there a solution to avoid out-of-pocket expenses in case of a medical emergency? Did you know there is a cashless claim feature in most insurance policies?
Yes, that’s correct. It would be great if there is a cashless option to avoid out-of-pocket expenses instead of a traditional reimbursement plan. Let us discuss this feature in-depth.
What is a Cashless Claim?
Unlike the old times when you would have to go through all the lengthy paperwork at the time of a medical emergency, you can now opt for a cashless claim and focus on staying with your family and supporting them. It makes the process of hospitalization much more straightforward by taking away all the hassles which you would have to go through such as arranging and handling of cash, documents etc.
Cashless Claims are claims that are settled directly between the insurer and the hospital without the insured paying the amount and getting reimbursed by the insurer later. It is done so by the hospitals now by sending the bills to the insurance company directly. This facility is only available with network hospitals. The latter settlement in which the insured would first pay the bills through his own pocket and wait for the insurer to pay him back is known as reimbursement.
What are Network Hospitals?
The only drawback of this claim is that to be eligible; your hospital should have a tie-up with your insurance company. In other words, it must be part of the network hospitals authorized by the insurance company. Otherwise, you will have to go through the Reimbursement process. The hospitals which are affiliated to the insurance companies are known as Network Hospitals. You can check for the tie-ups on the insurance company’s website or by calling your hospital in the case of your hospital. Insurance companies keep on adding and subtracting new hospitals in their network, so it would be better to stay updated about the same to avoid any last-minute hassle. Before you get admitted, it is best to check the insurance company call centre.
Now let’s discuss the claim procedure:
The claim process differs based on the type of treatment. The treatment can be planned in the case of maternity, knee replacement, cataract surgery, gall-bladder removal etc. Quite often; it is also unplanned as in the case of medical emergency.
Claim process for planned treatment:
In the case of planned treatment, the insurer must be informed at least four days before the treatment date. He should request for a cashless claim shall be submitted at the address of the insurer. You can send the request via post or email, whichever suits you. The insurer then informs the insured as well as the concerned network hospital about the policy cover and the eligibility of the same. On the date of hospitalization, the insured individual needs to show his/her health insurance card and the confirmation letter issued by the Insurance Company. The insurer then pays the medical expenses directly to the network hospital.
Claim process for an emergency treatment:
In the case of emergency treatment, the policyholder has an option to connect with the customer care department of the insurance company to get information about the nearest network hospital. You can then avail the cashless claim with the help of the health insurance card. It is always advisable to carry your identity card also along.
The hospital will complete the cashless claim formalities and submit it to the insurance company. The insurance company will issue an authorization letter to the insured indicating policy coverage. It generally takes 4-6 hours for the entire process. The insurer will then clear the medical expenses and hospital bills directly to the hospital. In case the claim is rejected, the insured will receive a letter stating the reasons.
Documents required for cashless claims
Documentation is of utmost importance as without the right documentation; you won’t be able to receive a claim.
- Duly filled claim form;
- Medical Certificate or the Form which is signed by the treating doctor;
- Discharge summary or card which would be availed from the hospital;
- All the receipts and all bills in original;
- Prescription and memos from the pharmacy or the hospital;
- Investigation reports;
To conclude, we would like to share the five most important things to know about the cashless claims;
- Available only at network hospitals:
As explained earlier, network hospitals have to be associated with the insurance partners to provide the cashless facility. The policyholders need to be very careful to check the network partners’ list to avail of this benefit. Ideally look for the updated list.
- Easy access to treatment:
The last thing that the family may want to get into would be painful string of formalities and endless documentation, in times of medical emergencies. It can be immensely stressful for the family to pay the bills right away during a medical emergency. With a cashless facility, the admission to the network hospital is by way of a health card. Therefore, the admission process and related documentation are partly done away and replaced with a hassle-free admission process in a cashless scheme.
- Affordable: The reimbursement procedure may take time and may affect the financial position of an individual as the out of pocket costs may be expensive. Quite often, people have to divest their investments to pay for such treatment. Also, at times, the claim is just partially settled. Therefore, a significant chunk of the expenses is borne by the policyholder. In case of a cashless facility, all the covered expenses are insured and paid by the insurance company directly to the hospitals. Just get due diligence done.
- Easy renewal: The renewal cycle for any health insurance policy is annual, and it is no different from a policy having the cashless feature. Further, there are options with lifetime renewability offering an uninterrupted coverage to the policyholder.
- Easy claim settlement process: There is a Third Party Administrator (TPA) in all the network hospitals to assist the policyholder with the claim settlement procedure. They are normally present at the hospital’s desk to ease the process and help with the necessary documentation. Therefore, the claim settlement process is quicker and smoother because of the essential support and assistance.
Insurance companies indeed have made the processes much more accessible and more straightforward. Still, your financial wellbeing depends solely on you, so always have an emergency fund for trying times like these. However, a cashless health insurance policy indeed reduces the financial burden in times of medical emergencies to a great extent allowing the family to focus on the right and adequate medical treatment and not on the cost of treatment.
What Are The Parameters One Should Check For While Shopping For A Health Insurance Plan?
Here are some of the key factors to be considered.
Waiting periods for pre-existing diseases and the waiting period for specific surgeries/ailments/procedures;
List of daycare treatment/procedures covered;
Per illness limit, if any;
Whether the policy entails co-payment or fully reimbursable;
Exclusions under the policy;
The network of hospitals, whether the preferred hospital is part of the network or not should be checked beforehand;
The incurred claim ratio and claim settlement ratio of the insurance company should be analyzed.
Is It Better To Consider A Plan With A Wide Network Of Hospitals And Daycare Procedures?
The list of network hospitals keeps changing with some hospitals remaining constant and some new ones getting added and many old ones get eliminated. This happens because hospitals need to meet specific requirements to stay in the network. Also, there have been instances where hospitals deny cashless claims for specific insurance companies due to some unresolved disputes, payment delays or related issues. These can be a major risk for the insured.
Also, if a plan offers a long list of daycare procedures, it doesn’t mean that it is better than a plan which provides lesser daycare procedures. This is because they may also have an exhaustive list of restrictions and conditions. This can lead to high claim rejections.
What is the eligible age to buy health insurance?
While eligibility age for health insurance policies differs, the general eligibility age for adults ranges between 18 - 65 years. The eligibility age for children is between 90 days up and up to 18 years.