Imagine, either you or your loved one is facing a medical emergency. Amid the stress, you find comfort in knowing that your health insurance will cover the expenses. But then, the unexpected happens – your claim gets stuck. Frustration mounts as you navigate the labyrinth of claim rejections and settlement delays.

Why does this happen and what can you do to resolve it?

The Growing Concern of Health Insurance Claims

According to the Council for Insurance Ombudsmen’s annual report for 2022-23, a staggering 50.6% of the 51,103 insurance complaints received between April 1, 2022, and March 31, 2023, were related to health insurance. Even more concerning, 93.14% of the total entertainable complaints disposed of were about the partial or total repudiation of claims by insurers.

An online survey by ET Wealth further reveals that nearly 88% of policyholders have faced problems in claim settlement with 59% encountering issues with claim rejection and partial payments. Astonishingly, 69% claimed their grievances were not adequately resolved by the insurer. While dealing with health claim rejections is tough, especially during medical crises, it's essential to note that the insurance industry does pay out more than 90-95% of claims, according to public data.

What are claims related issues?

1. Claim Rejections

a. Non-disclosure of pre-existing disease: 

Claims can be denied if pre-existing medical conditions were not disclosed when purchasing the policy. For example, if you had diabetes before buying the policy and was not disclosed, any claims would be rejected.

b. Mismatch in Medical records/incorrect diagnosis: 

Incorrect or inconsistent medical records and diagnoses can lead to claim rejection. For instance, if your medical records indicate a heart condition, but the diagnosis paperwork submitted with the claim shows a respiratory issue, the insurer might reject the claim due to inconsistency.

c. Incomplete Information and missing documents: 

Providing incomplete information or failing to submit required documents can result in a claim being rejected. For example, if you submit a claim for surgery but fail to provide the detailed hospital bills, your claim may be denied.

d. Claim made during waiting period: 

Claims made within the policy's waiting period for certain conditions are not eligible for payment. Typically, the initial waiting period is 30 – 90 days and a pre-existing after a specified  period is 2-3 yrs.

e. Policy Exclusion: 

Claims related to treatments or conditions excluded by the policy terms will be denied. Please check which treatments are covered and are not. For example, if your policy excludes cosmetic surgery and you file a claim for such a procedure, it will not be covered.

f. Lapsed Policy: 

Claims made after the policy has expired or lapsed are not valid.  Keep a track of the premium date. As per IRDAI, now insurers will have to mandatorily approve claim during a grace period i.e. – 15 – 30 days.

g. Delay in Intimation: 

Delays in notifying the insurer about a claim can lead to rejection. There is specified time to submit claim. For example, if your policy requires intimation within 48 hours of hospitalization but you inform them after a week, your claim might be denied.

2. Partial Claim Payment

a. Sub limits: 

There are sub-limits in Room, rent, ICU charges, specific diseases, surgeries, treatments, ambulance cover etc. Payments may be reduced if the claim exceeds specific sub-limits set for treatments or procedures. For example, if your policy has a sub-limit of ₹50,000 for cataract surgery but your claim is for ₹70,000, you will only receive ₹50,000.

b. Non-medical expenses:

IRDAI has exempted health insurers from paying certain non-medical expenses. Costs for non-medical items such as toiletries or administrative fees are often not covered such as Room charges, Treatment cost, Procedure Cost, Optional costs etc. For instance, Room charges include gown, gloves, oximeter, sanitizer, comb, brush, housekeeping staff etc are not included.

c. Policy Exclusions:

Partial payments occur if some aspects of the claim fall under policy exclusions. For example, if your hospitalization is partly for a covered condition and partly for a non-covered cosmetic procedure, you will only receive payment for the covered condition.

d. Co-payment and deductible:

The insured must pay a portion of the claim amount as per the co-payment and deductible clauses.

Copayment - For instance, if your policy includes a 20% co-payment clause and your claim is ₹1 lakh, you will need to pay ₹20,000 and then the insurer company will pay rest ₹80,000.

Deductible – If policy includes 8L cover with Deductible of ₹ 200,00 and the bill amount is of ₹ 500,000. The policy holder pays ₹ 200,000 and then only the insurer company pays remaining ₹ 300,000.

e. Non network hospitalization:

Treatments at non-network hospitals may result in lower claim amounts or additional charges. For example, if you are treated at a hospital outside the insurer's network, your claim reimbursement may be reduced by 20%.

f. Documentation and billing:

Incomplete or improper billing and documentation can lead to partial claim payments. For instance, if the hospital bill lacks itemized charges, the insurer might only partially reimburse the claim.

3. Claim Settlement and Discharge Delays

Settlement Delays:

Delays in claim settlement can occur due to prolonged verification and approval processes. For example, if the insurer requires extensive documentation and multiple verifications, the settlement process can take several weeks.

Discharge Delays:

Discharge from the hospital can be delayed due to pending formalities or insurer approvals. For instance, if the hospital is waiting for the insurer's final approval on the claim, your discharge might be postponed.

What Can You Do to Avoid These Issues before purchasing the health plans?

Before purchasing a health policy, it’s crucial to ask the right questions to the insurer company.

1. Are there any sub-limits on specific treatments?
2. What are the waiting periods for different conditions?
3. What are the co-payment and deductible clauses?
4. Are there any policy exclusions I should be aware of?
5. Which hospitals are in the network?
6. What is the claim process?
7. Will I be covered for pre-existing disease?

What to Do When Your Health Insurance Claim Is Stuck?

If you find yourself in a situation where your medical claim is stuck, follow these steps to resolve your grievance:

Step 1: Approach the Insurer

Walk into the insurer's office or contact its Complaints/Grievance Redressal Cell. You can find the contact details of all health insurance companies on the IRDAI website. Submit your complaint in writing along with all supporting documents and obtain a written acknowledgment with the date.

Step 2: Contact IRDAI

If the insurer doesn't respond within two weeks, approach the Grievance Redressal Cell of the Policyholder's Protection & Grievance Redressal Department of IRDAI through any of these options:

• Use the Bima Bharosa System on the IRDAI portal to register the complaint and monitor its status. Once registered, the complaint details are forwarded to the insurer, and you will receive a confirmation email with an IRDAI token number to track the complaint.
• Send an email to complaints@irdai.gov.in or call the toll-free number 155255 or 1800-4254-732.
• Send the complaint in physical form to: General Manager, Insurance Regulatory and Development Authority of India, Policyholder's Protection & Grievance Redressal Department - Grievance Redressal Cell, Sy. No.115/1, Financial District, Nanakramguda, Gachibowli, Hyderabad - 500 032.

Step 3: Approach the Insurance Ombudsman

If your claim is below ₹50 lakh and you have already contacted the insurer without a satisfactory resolution, you can approach the Council for Insurance Ombudsmen. The ombudsman will review your case and make a fair recommendation. If you accept it, the insurer must comply within 15 days. If not, the ombudsman will pass an award within three months, binding on the insurer to comply within 30 days.

Conclusion

Navigating the complex world of health insurance claims can be daunting, especially during a medical emergency. Understanding the common reasons for claim rejections, partial payments, and settlement delays can help you avoid these issues. Always ask the right questions before purchasing a policy and know the steps to take if your claim gets stuck. By being informed and proactive, you can ensure a smoother claims process and focus on what truly matters – your health and well-being.