Cashless vs Reimbursement Health Insurance Claims: Everything You Need to Know

Earlier, health insurance claim processes were long and tedious, making individuals hesitant to buy health insurance policies. Today, the Indian insurance industry has evolved, offering better and improved health insurance claim settlement processes.

There are two main types of health insurance claim processes: Cashless Claim and Reimbursement Claim. Here’s everything you need to know about both claim processes.

What Is a Health Insurance Claim?

A health insurance claim is a formal request submitted to the insurance provider to cover or reimburse the medical expenses incurred by the insured. A claim notifies the insurer and activates your health insurance benefits, reducing the financial burden of medical bills and minimising out-of-pocket expenses for the medical treatments received.

The policyholder or the insured family member can raise a health insurance claim. If the policyholder is hospitalised, unable to move, or has passed away, an immediate family member such as a spouse, parent, or adult child, or a nominee can file the claim on their behalf.

Types of Health Insurance Claims

There are two primary methods of health insurance claims.

Cashless Health Insurance Claim

A cashless health insurance claim allows you to receive medical treatment without paying the covered medical expenses upfront or out of pocket. Your insurance provider will coordinate directly with the hospital and settle the covered medical bills. To be eligible for a cashless health insurance claim, you must seek treatment at a hospital that is part of your insurer’s cashless network.
Cashless health insurance claims are best for planned surgeries and urgent medical treatments at network hospitals.

What Is a Network Hospital?

A network hospital is a medical centre with a formal partnership with a health insurance provider. If you opt for a cashless hospitalisation benefit, you must receive treatment at one of these network hospitals where your insurance provider will directly settle the medical bill with the hospital. This eliminates the need for upfront payment and saves your out-of-pocket expenses.

Reimbursement Health Insurance Claim

In the reimbursement health insurance claim process, you must pay your medical bill upfront at the time of discharge and raise a claim with your insurer within the specified timeframe. You have to submit a filled claim form along with all original bills, discharge summary, and prescriptions to your insurer or the Third-Party Administrator (TPA) within 7–15 days.

Cashless vs Reimbursement Claims: Key Differences

Here’s a comparison table between Cashless and Reimbursement Claims to help select the most effective claim process.

Step-by-Step Cashless Claim Process

Here’s a step-by-step guide to the cashless claim process in health insurance.

Step 1: Notify Your Insurance Provider

Notify your insurance provider or the Third-Party Administrator (TPA) about your hospitalisation via their website, app, or customer care helpline. You must notify the insurer at least 48 hours before admitting into the network hospital. However, in case of an emergency, you must inform them within 24 hours of hospitalisation.

Step 2: Show Your Health Card & ID

At the hospital admission desk, provide your health insurance card or policy document and a valid government-issued identity proof such as Aadhaar, PAN, Passport, or Voter ID, and inform them that you want to use a cashless facility.

Step 3: Submit the Pre-Authorisation Form

The hospital's TPA desk will give you a Pre-Authorisation Form; fill in the patient's details, and the attending doctor will fill out the medical diagnosis, treatment plan, and estimated cost of treatment. The TPA will email these details to your insurance provider.

Step 4: Await Authorisation

The insurance provider’s medical team will review the Pre-Authorisation form, submitted documents, and the policy limits. On approval, you will receive an email or SMS with the approved amount, and the hospital will start the treatment.

In cases of medical emergencies, the insurer will review the request and approve or deny the cashless claim request within one hour. Once approved, you can receive treatment without paying out of pocket.

Step 5: Discharge & Final Settlement

At discharge, you must verify and sign all hospital bills along with the discharge summary. The insurer will pay the covered medical expenses directly to the hospital.

Step-by-Step Reimbursement Claim Process

Here’s a step-by-step guide to the reimbursement claim process in health insurance.

Step 1: Notify Your Insurance Provider

Contact your health insurance provider and inform them about the hospitalisation via their app, website, or customer care helpline number. For planned treatments, inform them within 48 to 72 hours before hospitalisation, and for emergencies, you must inform them within 24 hours of hospitalisation.

Step 2: Gather All Original Documents

Collect all original documents such as hospital bills, the discharge summary, medical reports, the claim form, and prescriptions required for filing health insurance claims, since most insurers do not accept xerox copies.

Step 3: Submit Your Claim

You can submit your reimbursement health insurance claim by visiting the insurer’s branch office or online via the insurer’s web portal or app.

Step 4: Verification and Payout

Once the claim is submitted, the insurer’s medical team will verify the documents against the terms and conditions of your policy. If any documents are missing, the team will contact you. Once the claim is approved, the reimbursement amount will be credited directly to your registered bank account within 15-30 working days.

Documents Required for Health Insurance Claims

The following documents are generally required for cashless and reimbursement claims.

Cashless Claims

Documents required at the time of admission in cashless claims.

• Health Insurance Card/E-Card.
• Photo identification such as your Aadhaar Card, PAN Card, passport, or voter ID.
• Doctor's prescription or diagnosis from your treating doctor recommending hospitalisation.
• Pre-Authorisation form.
• Medical records, including previous investigation reports, diagnostic test results, or your patient history that justify the need for treatment.

Documents required at the time of discharge in cashless claims.

In a cashless claim, though the insurer settles the bill directly with the hospital, you may need to review and sign certain documents.

• Final hospital bill and receipts
• Discharge summary
• Investigation reports such as laboratory test results, X-rays, or MRI scans conducted during your stay.

Reimbursement Claims

The following are the documents required for reimbursement claims in health insurance.

• Claim form filled with all necessary details.
• Discharge Summary with details such as your admission/discharge dates, diagnosis, and treatment provided.
• Original hospital bill.
• Original payment receipts.
• Doctor’s prescription or letter suggesting the hospitalisation, diagnostic tests, and consultations.
• Investigation reports such as lab tests, blood work, X-rays, CT/MRI scans, and ECGs.
• Original medicine bills with prescriptions.
• Copy of the patient's Aadhaar card, PAN card, Voter ID, or Passport.
• A cancelled cheque with your name pre-printed on it or a copy of your bank passbook for the NEFT or bank transfer.
• FIR or Medico-Legal Certificate (MLC) required for all accident-related claims.

Common Reasons Why Health Insurance Claims Get Rejected

According to the IRDAI annual report 2024-25, nearly 1 in every 12 policyholders had their claims rejected. The following are some common reasons why health insurance claims are rejected.

Hiding Pre-existing Diseases

If the policyholder intentionally hides an existing health condition or lifestyle habits such as smoking and drinking when buying the health insurance policy, it could lead to claim rejection.

Waiting Period

Claims for medical expenses incurred during the standard initial or Pre-Existing Disease waiting periods are rejected, as coverage for these conditions has not yet begun.

Incorrect Documentation

Health insurance claims can also be rejected due to incomplete or incorrect documents submitted. For example, missing discharge summaries, incorrect patient names, unsigned forms, or inconsistent diagnosis reports.

Policy Exclusion

Cosmetic surgeries and non-essential dental procedures are not covered under standard health insurance policies, leading to the automatic rejection of any such claims.

Delay in Procedure

If the policyholder fails to inform the insurer or the TPA about the hospitalisation within the specified time frame, their medical claim can be rejected.

Policy Maxed Out

Filing claims for medical expenses that exceed the total sum insured available for the policy year leads to claim rejection.

Tips for Faster Health Insurance Claim Settlement

The following are some tips to help you get your health insurance claims settled faster.

Cashless Claims

• Visit a Network Hospital

Insurers partner with specific hospitals to offer cashless claim facilities, which allow them to settle the medical bills directly with the hospital, eliminating the need to pay upfront.

• Submit the TPA Form

Fill and submit the pre-authorisation form at the hospital’s insurance desk. This allows the TPA to coordinate with your insurance provider and get your claim approved as soon as possible.

Reimbursement Claims

• File Claim Within the Deadline

File your health insurance claim form and attach the original copies of hospital bills, discharge summary, diagnostic report, and payment receipts within the stipulated timeframe after you’re discharged. Submit all the required documents to ensure faster and smoother claim approval and reimbursement.

What If Your Health Insurance Claim Is Rejected?

Here’s what you must do if your health insurance claim is rejected.

Get a Written Rejection Letter

In case of claim rejection, request your insurer to provide a written explanation regarding why your claim was rejected. This will help you understand whether the claim denial is valid and which policy clause is being referred to justify the rejection.

Identify the Reason for Claim Rejection

Carefully read and understand the official claim rejection letter and check it against your policy terms and conditions. If the rejection is due to missing or incorrect documents, you can resubmit the complete paperwork and get your claim approved.

File a Complaint With Your Insurance Provider

If your claim is rejected due to missing documents or unjustified grounds, you can file a formal complaint with your insurer's Grievance Redressal Officer (GRO). To do this, submit a formal letter detailing your policy and claim numbers, the exact reason for the denial, and your arguments for disputing it. Be sure to support your claims with all relevant, verified documents.

Escalate to the Insurance Ombudsman

If the insurer’s Grievance Redressal Office fails to resolve the issue and present a satisfactory resolution, you can escalate the dispute to the Insurance Ombudsman. This entity is appointed to act as a mediator between the insurance provider and the policyholder and offer a resolution and recommendation based on the facts presented.

FAQs

What is a cashless health insurance claim?

Cashless health insurance claims are those in which your insurer settles your hospital bill directly. They are normally offered by the insurer only to their network hospitals.

What is a reimbursement health insurance claim?

A reimbursement health insurance claim means you settle the hospital bill yourself first and then submit all the necessary documents to your insurer to claim reimbursement of the eligible amount.

Is there a cashless claim facility at every hospital?

No. Cashless claims are provided by insurers at their network hospitals. For non-network hospitals, you need to make reimbursement claims.

What documents are needed for filing reimbursement claims?

You need to submit a duly filled claim form, original bills from the hospital, discharge report, prescriptions, diagnostic reports, payment receipts, and bank account details for filing reimbursement claims.

What happens if my health insurance claim is rejected?

Your insurer will give reasons why your claim got rejected. You can then appeal against the insurer’s decision by providing extra documents or filing a grievance against the same.

Can I file my health insurance claim online?

Yes, you can file your health insurance claim online by visiting your insurer’s app or website and submitting your claim along with the required documents.