Starting from August 1, 2024, insurance companies in India will be required to implement cashless settlement for health insurance claims. This initiative aims to streamline and expedite the process of hospital bill settlement for policyholders. The Insurance Regulatory and Development Authority of India (IRDAI) has specified that insurers must establish the necessary systems and procedures for cashless settlement by July 31, 2024.
To facilitate cashless settlement, the IRDAI has instructed insurers to set up dedicated Help Desks at hospitals in physical mode. These Help Desks will assist policyholders with their cashless requests. Additionally, insurers are also required to provide pre-authorization to policyholders through digital channels.
The IRDAI emphasizes that insurers should strive to achieve 100% cashless claim settlement within a specified timeframe. The goal is to minimize the instances where claims are settled through reimbursement, with such cases being limited to exceptional circumstances.
The regulator has set specific timelines for the processing of cashless authorization requests. Insurers should decide on these requests immediately, but not later than one hour from the time of receipt. Furthermore, insurers must grant final authorization within three hours of receiving the discharge authorization request from the hospital. The policyholder should not be made to wait for discharge beyond this timeframe.
In cases where the insurer fails to meet the three-hour authorization deadline, any additional charges imposed by the hospital should be borne by the insurer from its shareholder’s fund. Moreover, if the policyholder dies during treatment, the insurer is required to promptly process the claim settlement request and arrange for the immediate release of the mortal remains from the hospital.
Simplifying the Claim Settlement Process
The current claim settlement process has been burdensome for policyholders in India. According to a survey conducted by LocalCircles, 43% of insurance policyholders encountered difficulties in processing their health insurance claims over the past three years. Challenges ranged from claim rejections based on classifying a health condition as pre-existing to partial approval of claims.
Policyholders and their family members often find the process of claiming health insurance to be extremely time-consuming. Some policyholders have reported spending the last day of their hospital admission running around to get their claims processed. The survey highlights cases where patients faced delays of 10-12 hours before being discharged due to ongoing claim processing.
To address these issues, the IRDAI has mandated that no claim should be repudiated without the approval of the Product Management Committee (PMC) or the Claims Review Committee (CRC), which is a sub-group of the PMC. If a claim is partially or fully rejected, the insurer must provide detailed information to the claimant, referencing the specific terms and conditions of the policy document. Insurers and Third Party Administrators (TPAs) should collect the required documents from hospitals after being notified of the claim, relieving the policyholder from the burden of document submission.
Portability of Health Insurance Policies
The IRDAI also emphasizes the policyholder’s right to transfer their policies from one insurer to another. Both the acquiring and existing insurers are responsible for ensuring a seamless transfer of underwriting details and claim history. The existing insurer must provide the requested information to the acquiring insurer within 72 hours of receiving the request through the Insurance Information Bureau of India (IIB). The acquiring insurer should then respond and communicate their decision within five days of receiving the information.
Policyholders have the entitlement to transfer accrued benefits, such as the sum insured, no claim bonus, specific waiting periods, waiting period for pre-existing diseases, and moratorium period, from the existing insurer to the acquiring insurer. The aim is to provide policyholders with more flexibility and choice when it comes to their health insurance coverage.
These measures implemented by the IRDAI are designed to simplify and improve the health insurance claim settlement process in India, ensuring a smoother and faster experience for policyholders.