Cashless claim denied or partly approved: what to do at the hospital

Why was my cashless claim denied?

Cashless is usually denied because the insurer or TPA can’t confirm, from the hospital’s pre-authorisation request, that the treatment is covered. The decision is made on a short form and a few reports, so gaps in the paperwork are a common cause. The usual reasons are:

• Incomplete pre-authorisation. The form doesn’t say how long you have had the illness, leaves out past history, or lacks the reports that support the diagnosis.
• A possible pre-existing condition. If the notes suggest the illness started before your policy, the insurer may want to check your disclosure first. See pre-existing disease.
• A waiting period. The condition may still be in the initial, specific-disease or pre-existing-disease waiting period.
• An exclusion. The treatment is listed as excluded, or the insurer thinks it doesn’t need admission and could be done as an outpatient.
• Policy not in force. The premium wasn’t paid, or the policy lapsed after the grace period.
• A non-network hospital. Cashless is normally available only at hospitals in the insurer’s or TPA’s network.
• Not enough sum insured left, or details such as the patient’s name, age or policy number don’t match.

A partial approval is different. The insurer agrees to pay part of the bill, usually because the first approval is an estimate, or because of non-payable items, a room above your limit, co-payment or sub-limits.

Denied, partly approved, “query raised” or “converted to reimbursement”: what each status means

Each status asks you to do something different, so read the exact words on the letter or message before you react.

How long can the insurer take to approve cashless?

One hour for the cashless decision and three hours for final approval at discharge, under IRDAI’s Master Circular on health insurance of 29 May 2024. The circular says:

• The insurer must decide on a cashless request immediately, and in any case within one hour of receiving it. Insurers had until 31 July 2024 to set up systems for this.
• Final authorisation at discharge must come within three hours of the hospital’s request, and the patient shouldn’t be made to wait.
• If discharge approval takes longer than three hours, any extra amount the hospital charges is paid by the insurer from its shareholders’ funds, not by you and not from your sum insured.

The circular sets no specific penalty for missing the one-hour limit, but you can still complain about it. In practice, waits are often longer: in the LocalCircles survey reported by Outlook Money, 6 in 10 claimants said they had waited 6 to 48 hours. Note the time the hospital sent the discharge request; you’ll need it if you’re charged for the delay.

What to do at the hospital desk right now

Keep treatment going, get the reason in writing, and fix what can be fixed before discharge.

1. Ask for the denial or query letter. Get the exact reason in writing from the hospital’s insurance desk or the TPA.
2. If it’s a query, answer it fast. Ask the treating doctor to fill the gaps, such as how long you have had the condition and why admission is needed, and ask the desk to resubmit.
3. Check the reason against your policy. Is it a waiting period, an exclusion, a room above your limit or a sum insured problem? Your schedule and Customer Information Sheet will tell you quickly.
4. Call the insurer or TPA yourself. Note the call reference number and ask for the request to be escalated for review.
5. At discharge, get the breakup. Ask which amounts are non-payable (usually final) and which are held back for a missing document (usually claimable later).
6. Don’t delay care to argue. If cashless is refused, pay or arrange a deposit and keep every original bill, receipt and report.
7. Collect everything before you leave. Discharge summary, final bill with itemised breakup, payment receipts, reports, prescriptions, implant invoices and stickers, and the denial letter. Ask the hospital to fill in and stamp Part B of the claim form.
8. File the reimbursement claim on time. Many policies want it within 30 days of discharge. See the reimbursement documents checklist.

Example: a partly approved cashless claim

Example. Your final bill is ₹2,00,000. The insurer’s final approval is ₹1,62,000, and the TPA’s note lists what it didn’t approve. You pay ₹38,000 at the desk.

If the insurer accepts the implant invoice, you get ₹31,000 back and your final cost is ₹7,000. Under IRDAI’s 2024 Master Circular, the insurer or TPA should collect cashless claim documents from the hospital, not from you, so first ask the hospital desk to send the invoice before you leave. If the amount is still held back at discharge, ask the TPA to confirm in writing that you can claim it as reimbursement.

Can you get cashless at a hospital outside the network?

Sometimes, but it isn’t a right. IRDAI’s 2024 Master Circular requires insurers to state on their websites that treatment at a hospital outside their network needs a reimbursement claim.

The General Insurance Council, an industry body, launched a voluntary “Cashless Everywhere” initiative on 24 January 2024. As reported at launch, you can ask for cashless at a non-network hospital if you inform the insurer at least 48 hours before a planned admission, or within 48 hours of an emergency admission, and the claim is admissible under your policy. It works subject to the hospital’s and the insurer’s terms, so confirm with both before relying on it.

Does a cashless denial mean the claim is rejected?

No. A cashless denial only means the insurer won’t guarantee payment to the hospital on the information it had. You can pay the bill and file a reimbursement claim with the full documents, and it will be assessed afresh. IRDAI’s September 2024 policyholder-protection Master Circular says claims other than cashless must be settled within 15 days of submission, with interest at the bank rate plus 2% if late.

If the reimbursement claim is also refused, you then have a claim rejection, and the steps in health insurance claim rejected apply. If it is paid only in part, see why a claim is paid less.

What to check in your policy

1. Claims procedure section: search “cashless”, “pre-authorisation” and “intimation”. Many wordings ask for notice at least 48 hours before a planned admission and within 24 hours of an emergency one.
2. Definitions: “Network Provider” and “Cashless facility”, to see where cashless applies.
3. Pre-authorisation validity: some wordings say an approval is valid only for a set period, such as 15 days.
4. Non-payable list: search “non-medical” or “consumables”. These are what you pay at the desk even when cashless is approved.
5. Schedule and Customer Information Sheet: your room rent limit, co-pay and sub-limits, which decide the gap between the bill and the approval.
6. Insurer website or app: the current network hospital list and your health card or e-card.

Where people get caught out

• Treating a denial as final. People leave without the originals and then can’t file a reimbursement claim.
• Upgrading the room after approval. A costlier room can cut the approved amount on the doctor and surgery fees too. See proportionate deduction.
• Leaving queries unanswered. A query is not a denial, but it becomes one in effect if nobody responds.
• Assuming a non-network hospital will give cashless. Check the network list, or inform the insurer early if you plan to use Cashless Everywhere.
• Not noting the discharge request time. Without it, it is hard to show that a charge arose from a delay beyond three hours.