Health insurance: IRDAI sets 3-hour time limit for insurers to clear cashless claims. Details here

The Insurance Regulatory and Development Authority of India (IRDAI) has made some major changes in the regulatory norms for health insurance policies. The regulator has issued a comprehensive Master Circular on Health Insurance Products repealing 55 circulars. All the entitlements in a health insurance policy available to a Policyholder have been brought in one place in the Master Circular. 

One of the major changes introduced by the IRDAI is the measure towards providing seamless, faster and hassle-free claims experience to a policyholder procuring health insurance policy and ensuring enhanced service standards across the health insurance sector.

In its master circular, IRDAI 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," IRDAI said in a master circular dated May 29, 2024.

The regulator further 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 insurance regulator said 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 claims

The IRDAI said the insurers should 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.

Other changes

> IRDAI also said policyholders should be provided wider choices by the insurers by making available products/add-ons/riders by offering diverse insurance products catering to all ages, regions, occupational categories, medical conditions/ treatments, all types of Hospitals and Health Care Providers.

> A policyholder with multiple health insurance policies gets to choose the policy under which he/she can get the admissible claim amount.

> The insurers will also need to provide a Customer Information Sheet (CIS) along with every policy document. 

>  In case of no claims during the policy period, the insurers may reward the policyholders by providing an option to choose such No Claim Bonus either by increasing the sum insured or discounting the premium amount.

> Policyholder to get refund of premium/ proportionate premium for the unexpired policy period, if he chooses to cancel his/her policy at any time during the policy term. 

Policyholders and health insurance

Earlier, a survey by Local Circles found that 43 per cent of insurance policyholders had difficulties processing their “health insurance” claims in the past three years on an aggregate basis.

The survey said the process of claiming health insurance is extremely time consuming with many policyholders and their family members spending the last day of their hospital admission running around trying to get their claim processed.

"In several cases cited by policyholders, 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."