If you find yourself at a hospital for a check-up, After some time, you have finished the check-up, and the nurse gives you the bill. Do you pay from your pocket and later claim reimbursement? or would you prefer to go the cashless route so that your health insurance can deal with the payments directly with the hospital? This is the question so many policyholders are faced with when it comes to handling health care costs.
Whilst the whole aim of health insurance is to shield you from the shock of the financial impact of a medical bill, the claiming process can often be very daunting. Among the most critical decisions that have to be taken during filing a claim is a cashless facility or paying first and getting an amount reimbursed later. Both are things that you can do to take the burden off your wallet, but each of them has some major differences that can change the healthcare game for you.
What is a health insurance claim?
A health insurance claim refers to a request to the insurance company from an individual or their health care provider for the payment of money to meet the expenses accrued from treatment on grounds of sickness, bodily injury arising out of an accident, and other necessities for good health.
The procedure includes several steps with different document requirements based on the type of treatment and insurance policy that will be covered. When one, therefore, files a claim, they are, in other words, appealing to the insurer to comply with the financial obligation as promised by their policy.
There are mainly two types of health insurance claims:
- Cashless Claims: The insured gets the medical care from a network hospital, and the insurer pays the bills directly to the health care provider. However, the insured should remain prepared to pay for those expenses that are not covered.
- Reimbursement Claims: The insured will have to pay from their pocket and later reimburse the complete claim amount to the insurance company, including the bills, prescriptions, and treatment details of the claim, according to the policy coverage.
The insurance company assesses a claim before it approves or rejects the claim to ensure it is within the policy’s terms and conditions.
How does the Health Insurance Claim process work?
Here’s how the health insurance claim process typically works:
Obtain Treatment:
The insured seeks treatment from a healthcare provider, either at a network facility (for cashless claims) or a non-network facility (for reimbursement).
Cashless Claims Process:
- Choose a Network Hospital: Before finalizing the treatment location, ensure the hospital is part of the insurer’s network to utilize the cashless claim feature.
- Pre-Authorization Request: The hospital’s insurance desk submits a pre-authorization request to the insurance provider before admission, including details of the proposed treatment and estimated costs.
- Approval: After reviewing the request, the insurer will authorize the treatment only if it lies within the scope of the policy terms and conditions. After doing so, the hospital is authorized to proceed. The patient undergoes necessary treatments, while the hospital sends the bill directly to the insurer for the approved costs. The patient may still have to pay non-covered expenses or make co-payments.
Claims Process for Reimbursement:
- Collection of Documents: The insured collects all the necessary documents from hospitals, prescriptions, and reports after treatment.
- Submit a Claim: The insured completes a claims form with all supporting documents and submits it to the insurance company within a stipulated period.
- Evaluation: The insurance company evaluates the submitted documents to confirm coverage according to the policy and further assures that the expenses are reasonable and genuine.
- Reimbursement: Reimbursement to the insured takes place directly from the insurer through the fulfilment of conditions stipulated within the policy, usually by direct deposit to the bank account or by issuing a cheque.
Claims Review and Settlement:
- On the claim being received, the same is processed by the insurer, and, upon fulfilment of various terms and conditions of the policy, the claim is either accepted or rejected.
- If a claim is rejected or partially approved, the insured receives an explanation from the insurer, who is allowed to appeal or provide any further documentation.
Final Settlement:
- The insurer pays the bills directly to the hospital (cashless) or reimburses the insured (reimbursement). A better understanding of the procedure to claim and the documentation and submission requirements ensures a smooth and effective settlement of medical bills.
What is a Cashless Claim in Health Insurance?
A Cashless claim in health insurance is a feature that allows the insured party to avail of medical treatment without the need to pay any amounts upfront at the time of treatment. Instead, the concerned insurer will directly settle the medical bills with the healthcare provider, but only if the hospital belongs to the insurer’s listed network.
Definition:
A cashless claim is a health insurance facility where the policyholder is not required to settle the medical bill at the time of treatment. The insurance provider will pay the hospital all charges towards covered expenses.
Purpose:
- Immediate Medical Treatment: The cashless claim ensures that the insured undergoes treatment without delay in the absence of any money at the time of treatment.
- Reduced Financial Burden: It saves the insured from heavy payments at the time of treatment and later claims for reimbursement, hence reducing the loss of out-of-pocket expenses.
- Simplified Billing Process: The billing process takes place directly between the hospital and the insurance company, thereby saving the insured from any administrative work.
- Streamlined Claims Process: In case of pre-authorization, the insured will be pre-authorized for treatments covered in the policy well in advance of getting the treatment.
- Financial Security: Through direct payments for eligible medical costs, the insured person experiences peace of mind, as one is sure that their healthcare needs are taken care of without any hitch in time or financially.
- Accessibility of Network: It ensures the insured person has access to the best health facility fitting the set standards by the insurance company for care and billing practice.
In short, cashless claims make a more convenient and efficient way for insured individuals to have health care without making immediate financial hindrances.
What is Reimbursement Claim in Health Insurance?
A reimbursement claim is a claim made by the insured in the health insurance policy, and he or she has to be paid an amount by the insurer. This takes place when a policyholder has availed treatment in a hospital that is not in the network, or due to some other restrictions.
Definition:
It refers to a case of health insurance wherein the insured person has to recover the costs of his treatment from the insurance company upon making a payment. The amount claimed is paid to the policyholder only after the insurance company is through with the assessment of the claim based on the rules and regulations of the policy.
Purpose:
- Freedom of Choice of Hospital: The Policyholder may take treatment in any hospital or clinic using this reimbursement claim, even outside the network of the insurance provider.
- Comprehensive Treatment: It will save the policyholder from getting restricted to a range of network hospitals and will ensure that one gets the treatment from his comfort or specific doctors.
- Timely Medical Care: In an emergency, the insured, using the reimbursement claim, can get at once the treatment without pre-authorization or network requirements.
- Wider Range of Expenses Covered: There may be certain added-up expenses, including medicines or tests that are paid by the policy, but not through the cashless system. If some policies have this coverage of more expenses, such as prescription drugs or diagnostic tests, then maybe in a cashless system, they are not fully covered.
- Financial Aid: Through the process of reimbursement, it ensures that the policyholder will get financial aid regarding the cost of medical treatment, provided it is made under the terms and conditions or limits of the policy.
To claim reimbursement, one has to fill out a claim form and submit it with all the papers of the medical treatment, which include documents, bills, and receipts to the insurance provider. The insurer then reimburses the eligible costs directly to the insured, ensuring that financial relief is gotten after an upfront payment.
What is the Difference between cashless claims vs reimbursement claims in Health Insurance?
Below is a comparison of cashless and reimbursement claims on health insurance based on the key points provided above.
Claim Process
Cashless Claim:
- The policyholder can take treatment in any of the network hospitals and ask them for insurance.
- The hospital will then forward the request for pre-authorization to the insurance company.
- At the time of discharge, the final bill will be sent to the insurance company for settlement.
Reimbursement Claim:
- Get the treatment in any hospital and gather bills and documents.
- Submit the claim along with all necessary documents (bill, prescription, etc.) to the insurance company.
- The insurer will assess the documents provided and reimburse the pre-approved amount.
Claims Settlement
Cashless Claim:
- The insurer and the network hospital settle the claim directly. But sometimes the insured might have to pay the non-payable expenses like a non-payable room, medicines, and other items of personal use.
Reimbursement Claim:
- The insured will receive the claim amount from the insurance company directly into the account after submitting all the necessary documents and approval.
Claims Approval
Cashless Claim:
- Yes, prior authorization is required. The insurer must approve treatment before or immediately following admission.
Reimbursement Claim:
- No, prior authorization is not required, but the insurer assesses documents after treatment for approval of reimbursement.
Time Taken
Cashless Claim:
- Less time since the insurer approves treatment before it starts. Direct settlement between the insurer and the hospital simplifies the process.
Reimbursement Claim:
- More time since documents have to be collected before filing claims and claim evaluation before payment.
Documentation Required:
Cashless Claim:
- Health insurance card or policy number
- Identity proof
- Pre-authorization form
Reimbursement Claim:
- Duly filled in the claim form
- Original bills and receipts from the hospital
- Prescriptions supported by the doctor’s report, diagnostic results, and discharge summary of the patient
Applicable Hospitals
Cashless Claim:
- The cashless claim is valid only in hospitals with which the insurance provider has a settlement.
Reimbursement Claim:
- Reimbursement of the claim is possible in any hospital, regardless of whether it’s affiliated with the insurer or not.
(NOTE:- Please ensure that hospitals are not on the excluded list. For hospitals that are excluded, neither cashless nor reimbursement claims will be approved.)
Also Read: What is Critical Illness Insurance – Must Know
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