What If Your Health Insurance Claim Is Rejected?

Admissible Claims

• We have often seen that insurance claims get rejected due to unnecessary hospitalisation because the insurers believe that hospitalisation was avoidable in some cases. 
• For example, if the treatment which could have been performed in an outpatient setting or through daycare procedures, got treated with unnecessary hospitalisation. In such cases, the insurer may deny the claim.
• Claims are rejected if the insurer finds out that no active medical treatment (such as surgeries, procedures, or medications) was provided during hospitalisation.

Solution: You need to ensure that your doctor provides a statement detailing the reason behind the hospitalisation of the patient.

Check this case study – https://economictimes.indiatimes.com/news/india/only-doctor-can-decide-about-hospitalisation-court-orders-star-health-to-pay-compensation-for-rejecting-claim/articleshow/102131911.cms?from=mdr

In this case, an insurer denied a claim stating that hospitalisation was not required. However after the claimant filed a case against the insurer in the court, the judgement was given in favour of the claimant.

• Insurers are expected to process claims within specified time limits as per regulatory guidelines. Delays from the insurers’ side may result in rejection if the claim is deemed invalid due to procedural time limits.
• If the insurer takes too long to verify documents or approve pre-authorization for cashless treatment, the hospital may refuse service or bills which may become ineligible for reimbursement.
• Submission of unclear discharge summaries or incomplete medical records can prolong the verification process. It might result in the claim denial.

Solution: Follow up regularly with the insurer to ensure timely claim processing. Keep records of communication to hold the insurer accountable.

• If a policyholder fails to declare their pre-existing medical conditions during the proposal stage, insurers may reject claims when such conditions are revealed during hospitalisation.

Solution: Always declare all the known medical conditions honestly while buying the policy.

• Every claim requires a specific set of documents, such as the discharge summary, medical reports, invoices, and prescriptions. If even one mandatory document is missing, the insurer may reject the claim.
• Submitting a claim without a doctor’s prescription for diagnostic tests can lead to suspicion about the necessity of the treatment.
• Many insurers require original hospital bills, receipts, and payment proofs for reimbursement claims. Submitting photocopies without originals may raise doubts about authenticity.

Solution: Always retain original bills and submit them when filing claims. Please refer to the insurer’s checklist of required documents and ensure all items are submitted.

• Insurance claims get rejected due to policy term misinterpretation when there is a lack of clarity about the terms and conditions. This happens when either the policyholder misreads the terms or the insurer sales professional mis-sells the policy.
• Policyholders often assume that their insurance covers all medical expenses. Unaware of the fact that all health insurance policies have specific inclusions and exclusions. Misinterpretation of these clauses can lead to rejected claims.
• Many health insurance policies have waiting periods for certain treatments or pre-existing diseases (2 to 3 years). If a policyholder files a claim in this period, it will be rejected.

Solution: Read the policy document carefully, paying special attention to the “Inclusions” and “Exclusions” sections. Understand the waiting periods for specific conditions before filing claims. Please ensure that the claims are submitted only after the waiting period has been served by the policyholder.

• Insurance claims get rejected due to delays in filing the claims because most insurance policies specify strict timelines within which claims must be submitted. Failure to adhere to these timelines can result in rejection.
• Insurance companies have set a clear deadline for claim submission – typically within 7 – 30 days for reimbursement claims and immediately for cashless claims. If the policyholder delays and breaches these timelines in document submission,it might lead to rejection.
• Many people are unaware of the timelines or misunderstand the deadlines for claim submission.

Solution: Please read the terms & conditions mentioned in the policy document and familiarise yourself with the claim submission deadlines. 

• Insurance claims get rejected for pre-authorization issues, where the policyholder doesn’t inform the insurer about hospitalisation to get pre-approval.  Especially for cashless claims, pre-authorisation is a crucial step in ensuring a smooth claim settlement experience.
• If a patient undergoes surgery without obtaining prior approval from the insurer, the cashless claim may be denied.

Solution: Please submit the pre-authorisation request as soon as the procedure is planned and provide all necessary details upfront.

Non-admissable Claims

• Many people have a misconception that their health insurance policy covers all illnesses from day 1 of buying insurance. But, most health insurance policies have an initial waiting period of 30 days. During this period, no claims will be accepted by the insurer except for accidents.

Solution: Be aware of the initial waiting period clause and plan medical expenses accordingly for non-emergency conditions during this time.

• Insurance policies often include a list of treatments, medical conditions, or situations that are permanently excluded from coverage.
• For example: Cosmetic surgeries, infertility treatments, or self-inflicted injury, where no insurer pays claims.

Solution: You need to carefully read the policy terms and conditions after purchasing to know what is not covered in health insurance.

• Insurance claims get rejected for fraudulent claims when the insurer identifies that the claim has been intentionally falsified or manipulated to gain financial benefits dishonestly.
• For example: If a person is submitting a fake diagnostic report or claiming for a condition that was never treated.

Solution: Always provide authentic medical records from reputable hospitals and practitioners.

• Some hospitals engage in unethical practices, such as inflating bills, unnecessary treatments, or falsifying medical records, which pushes insurers to blacklist them.

Solution: You need to verify whether the hospital is part of the insurer’s approved network or panel before seeking treatment to avail hassle-free cashless facility.

• The grace period is the additional time (typically 15 – 30 days) granted to policyholders to renew their insurance policy after the premium due date has passed.
• While the grace period allows the policyholder to renew their coverage without losing policy continuity, the insurance coverage is usually suspended during this grace period.

Solution: Always renew your policy on or before the due date to avoid gaps in coverage.

• Insurance claims get rejected due to policy lapse, which occurs when the policyholder fails to renew their health insurance or fails to pay the premium within the stipulated time.
• Without timely payment, the policy becomes inactive, making any claims during this period ineligible.

Solution: You can set up automated reminders or enrol in auto-debit options to ensure premiums are paid on time.