What is Cashless Claim Settlement?

When you claim insurance—be it a health insurance policy or motor insurance—in the face of an emergency, your choice of claim settlement method plays a key role in determining how you feel about your policy. You invest in insurance for the assurance of financial support in your time of need. Cashless claim settlement takes the relief a notch higher by letting you focus on the crisis at hand rather than worrying about arranging for funds at the moment. Confused? Don’t be. Here’s all you need to know.

What is Cashless Health Insurance?

Cashless health insurance refers to policies that offer the cashless claim settlement feature. Under such policies, when a policyholder is admitted to a network hospital, the insurer and the hospital coordinate to settle the medical expenses directly. To avail of this facility, the policyholder must inform the insurer within a specified timeframe—usually at least two days before planned hospitalisation and within 24 hours in case of emergencies. The hospital administration then contacts the insurer, sending a pre-authorisation form to initiate the claim settlement process.

What is Cashless Claim Settlement?

As a policyholder, there are two ways you can make a claim—cashless claim settlement and reimbursement claim settlement.

• Cashless claim settlement

Remember, you can avail of this benefit only at a network hospital or garage for health and motor insurance, respectively. Based on your policy terms, with cashless treatment, you can seek treatment at a network hospital or get your vehicle repaired at a network garage without paying anything out of your pocket. All you need is your insurance card and policy details. Your bills will be settled by the insurer with the hospital or garage directly.

• Reimbursement claim settlement

Reimbursement claim settlement is primarily used in cases where the insured either cannot access or wish to seek service at a network hospital or garage. Most insurance policies allow you to utilize the services of a network hospital or garage of your choice. However, in such situations, you must pay the bills upfront and later claim reimbursement from the insurer. To claim reimbursement, you will have to submit the original documents, bills, reports, etc. along with the duly filled-up claim request form. Once your documents are verified, the reimbursed amount is transferred to your bank account by the insurer.

Is Cashless Better Than Reimbursement?

When comparing cashless claim settlement to the reimbursement process, several advantages of the former become evident:

1. Immediate Financial Relief: In cashless settlements, the insurer directly pays the hospital, eliminating the need for the policyholder to arrange funds during emergencies. In contrast, the reimbursement process requires the insured to pay the medical bills upfront and then claim the amount from the insurer, which can be financially burdensome.
2. Simplified Process: Cashless claims involve coordination between the hospital and the insurer, reducing paperwork for the policyholder. Reimbursement claims, however, require the insured to collect all bills, reports, and relevant documents to submit to the insurer for claim processing.
3. Time Efficiency: The cashless process is generally quicker, with approvals often granted within a few hours. Reimbursement claims can take longer to process as they involve document verification and approval procedures.
4. Reduced Stress: Knowing that the insurer will handle the expenses directly allows the insured to focus on recovery without worrying about financial matters.

How Does Cashless Claim Settlement Work?

Given below is the cashless claim settlement process for health insurance:

• In case of a medical emergency, get admitted to a network hospital.
• Every network hospital has an insurance desk. You can get all the information regarding claim settlement here.
• Ask for a pre-authorization at the insurance desk. Or, get a declaration from the Third Party Administrator (TPA). Get a printout of the same.
• Submit the necessary form along with the pre-authorization letter or the TPA declaration.
• You will get an email confirming coverage and the maximum sanctioned amount.
• Once the treatment is completed, if the bill incurred is within the limits of the sanctioned amount, you will not have to pay a rupee. If the bill exceeds the limit, you will have to pay the extra amount.

Steps for Cashless Claims

To effectively utilise the cashless claim facility, policyholders should follow these steps:

1. Choose a Network Hospital: Ensure that the hospital where treatment is sought is part of the insurer's network. This information is typically available on the insurer's website or through customer service.
2. Inform the Insurer:
• Planned Hospitalisation: Notify the insurer at least two days before the scheduled admission.
• Emergency Hospitalisation: Inform the insurer within 24 hours of admission.
3. Provide Necessary Documentation: At the hospital, present your health insurance card and a valid ID. The hospital will assist in filling out the pre-authorisation form and submitting it to the insurer.
4. Await Approval: The insurer will review the pre-authorisation request. Upon approval, the treatment can proceed without any upfront payment from the policyholder.
5. Post-Treatment Process: After discharge, ensure that all original documents, bills, and discharge summaries are retained, as the insurer may require them for their records.
6. Settlement: The insurer will directly settle the approved amount with the hospital. Any non-covered expenses or exclusions will need to be paid by the policyholder.

Conclusion

Before choosing the cashless claim settlement method, look for your options for network hospitals and garages. When buying a health insurance policy, make sure your insurance company has a wide network of these facilities.

Furthermore, check the health insurance claim settlement ratio of the company as well. Every year the IRDA publishes the claim settlement ratio of all insurance companies registered under it. Always choose an insurance company such as ICICI Lombard that has a long record of consistent financial credibility. You can check the ICICI Lombard Claim Settlement Ratio either on its official website or the list of IRDA Claim Settlement Ratio 2022 report.

Disclaimer: The information provided in this blog is for educational and informational purposes only. It is not intended as a substitute for professional advice, diagnosis or treatment. Please consult a certified medical and/or nutrition professional for any questions. Relying on any information provided in this blog is solely at your own risk, and ICICI Lombard is not responsible for any effects or consequences resulting from the use of the information shared.