Hospitals and health insurers cannot take you for a ride over claims. Here's what is new

The days of waiting hours after discharge for hospital bill settlements and lengthy claim processing are long gone. The Insurance Regulatory and Development Authority of India (IRDAI) has taken a big step in streamlining the process. They have issued a new regulation aiming for 100% cashless claim settlement within a specific timeframe. 

This means health insurers must now approve within three hours of receiving the discharge request from the hospital. Importantly, under this new rule, hospitals cannot hold you up waiting for insurance authorisation before discharge.

According to Dhirendra Mahyavanshi, Co-founder and CEO of Turtlemint, the IRDAI's move to expedite cashless claims is a game-changer for policyholders. He believes it will significantly reduce the stress and anxiety associated with claim processing during emergencies.

The IRDAI master circular, issued on 29 May, sets a clear timeline for insurers. They are expected to strive for 100% cashless claim settlement in a time-bound manner. The insurers should aim to settle claims through reimbursement only in exceptional circumstances. 

The insurer is required to decide on the request for cashless authorisation immediately but not more than one hour after receipt of the request. Importantly, Insurers are to have the necessary systems and procedures in place by 31 July 2024, ensuring a smooth transition to the new regulation.

Health insurers can arrange for Help Desks in physical mode at the hospital to handle and assist with cashless claim requests. Additionally, they can provide pre-authorisation to the policyholder through digital mode, ensuring a smoother and faster claim settlement process.

Sanjiv Bajaj, Jt. Chairman and MD, Bajaj Capital Ltd, stated, "The recent circular by IRDAI, setting a 3-hour time limit for insurers to clear cashless claims, is a significant stride in the realm of customer-centric health insurance reforms. By mandating faster cashless authorisations and encouraging insurers to offer a wider range of products, add-ons, and riders, IRDAI is demonstrating its commitment to enhancing customer experience and satisfaction." This clearly indicates that the consumer's needs and convenience are at the forefront of these reforms.

"These measures are not only expected to increase the adoption of health insurance across India but also foster higher levels of trust between insurers and policyholders. With stricter review processes and a focus on maintaining high customer service standards, IRDAI is ensuring a more transparent and reliable health insurance environment, ultimately benefiting the consumer," Bajaj added.

The health insurer shall grant final authorization within three hours of receiving the discharge authorisation request from the hospital. In no case shall the policyholder be made to wait to be discharged from the Hospital. If there is any delay beyond three hours, the additional amount, if any, charged by the hospital shall be borne by the insurer from the shareholder’s fund. In the event of the policyholder's death during treatment, the insurer shall immediately process the request for claim settlement. Also, get the mortal remains (dead body) released from the hospital immediately, per the IRDAI circular.

"This initiative is a crucial step towards enhancing efficiency and customer satisfaction in the health insurance sector. At Vitraya, our AI-driven solutions are already designed to meet these stringent timelines, ensuring swift and accurate claims processing in under 2 minutes. These measures will significantly reduce patients' stress and financial burden during critical times. Vitraya is committed to supporting the insurance industry in meeting these regulatory standards and improving the overall claims experience for policyholders," said Avdhesh Sharma, president of Vitraya Technologies.

The IRDAI master circular also emphasises numerous key aspects for health insurance customers and insurers, including the policyholder's right to a premium refund for the remainder of the policy period if they cancel their policy prematurely.

Health insurers must comply with the Insurance Ombudsman's decisions within 30 days of receiving the award. If an insurer fails to honour the Ombudsman's award, it faces a penalty of Rs 5,000 per day payable directly to you, the complainant. This penalty is on top of any interest charges the insurer may already be liable for under The Insurance Ombudsman Rules, 2017.

You should also understand that you have rights as a policyholder. So, do not hesitate to file a complaint with the Ombudsman if you believe your health insurer has treated you unfairly.