Health insurance claim regulation:
Delays in processing health insurance claims by insurers or third-party administrators (TPAs) have frequently been a nightmare for patients and their families. According to a survey by Local Circles, in many instances, patients had to wait for 10-12 hours post-discharge before getting clearance due to ongoing claim processing. This delay often led to additional expenses for the patients, particularly if they had to stay another night at the hospital. However, such experiences might become less frequent thanks to the recent regulatory intervention in the health insurance claim process by the Insurance Regulatory and Development Authority of India (IRDAI).
IRDAI has mandated that insurers must provide final authorization within three hours of receiving a discharge request from the hospital. The regulator emphasized that policyholders should not be made to wait unnecessarily for discharge, and any delay beyond three hours would result in the insurer covering any additional charges incurred by the hospital from their own funds.
Furthermore, in the unfortunate event of a policyholder’s demise during treatment, the insurer is required to promptly process the claim settlement request and arrange for the release of the mortal remains from the hospital.
Sanjiv Bajaj, Joint Chairman & MD of Bajaj Capital Ltd, views IRDAI’s recent circular as a significant stride towards customer-centric health insurance reforms.
Additionally, IRDAI has instructed insurers to aim for 100% cashless claim settlement within stipulated timeframes. In emergency situations, insurers must decide on cashless authorization requests within one hour of receipt. The regulator has set a deadline of July 31, 2024, for insurers to establish necessary procedures to achieve this objective, including setting up dedicated help desks at hospitals to assist with cashless requests.
Moreover, insurers are required to offer a digital pre-authorization process to policyholders, where an initial treatment amount is sanctioned digitally, pending final invoice receipt from the hospital.
On the settlement of health insurance claims, IRDAI emphasizes the importance of fair and transparent processes, ensuring that no claim is arbitrarily rejected without proper review and justification.
Anuj Parekh, Co-founder and CEO at Bharatsure, believes that this approach will lead to fewer claim rejections, ensuring due process is followed.
IRDAI also stresses the importance of offering a diverse range of insurance products covering various demographics and healthcare needs. The goal is to provide customers with options that suit their requirements and budgets.
Narendra Bharindwal, Vice President of the Insurance Brokers Association of India, underscores the need for policies to be portable and underwriting policies to be fair, aiming to foster trust and transparency in health insurance.
Moreover, policyholders with multiple health insurance policies will have the flexibility to choose which policy to use for claim settlement. The primary insurer is responsible for coordinating and facilitating settlement with other insurers if needed.
Lastly, insurers may reward policyholders with no-claim bonuses if no claims are filed during the policy period, either by increasing the sum insured or providing premium discounts.
Sanjiv Bajaj believes that these measures will not only encourage wider adoption of health insurance but also enhance trust between insurers and policyholders. With stricter review processes and a focus on maintaining high service standards, IRDAI aims to create a more transparent and reliable health insurance environment for the benefit of consumers.
