What to Do If a Cashless Medical Insurance Claim Gets Rejected at the Hospital

The convenience of cashless medical insurance lies in its promise of worry-free hospitalisation—where the insurer settles the bill directly with the hospital, leaving the patient or their family to focus solely on recovery. However, in some cases, the claim may be unexpectedly denied at the point of admission or during hospitalisation. This situation can be distressing, both emotionally and financially. But rejection is not the end of the road. With the right information and timely action, such issues can often be resolved or converted into a reimbursement claim.

This article outlines the steps to take when a cashless medical insurance claim is denied, reasons for rejection, and how the claim settlement ratio in health insurance can guide your insurer selection.

Understanding why cashless claims are rejected

Rejections of cashless claims are usually procedural and not always reflective of the policyholder’s eligibility. Common reasons include:

Incomplete documentation: Missing doctor’s notes, diagnostic reports, or medical history can lead to denial.
Policy exclusions: The treatment may fall under a policy exclusion like cosmetic procedures or alternative therapies.
Waiting periods: Claims for pre-existing conditions or specific treatments may be rejected if waiting periods are not completed.
Hospital not in network: If the hospital is not empanelled with the insurer, cashless approval is not possible.
Non-disclosure: Failing to disclose pre-existing illnesses or misleading information can lead to outright denial.
Deviation from standard treatment: If the prescribed treatment is not in line with standard medical practices, the insurer may refuse the claim.

Understanding the cause of denial is the first step in formulating your response.

Immediate steps to take if your cashless claim is denied

Request the denial reason in writing: Ask the hospital TPA desk or insurer to provide the specific reason for rejection along with reference documents. This helps clarify whether the issue is due to technical error or policy terms.
Check your policy inclusions and exclusions: Go through your policy document and verify if the treatment or claim falls within the eligible coverage.
Speak to the hospital’s TPA coordinator: The third-party administrator may assist in reviewing the documents submitted or reapplying with the necessary corrections.
Contact the insurer’s customer care: Some rejections happen due to coding errors or missing paperwork. Speak directly with the insurer for clarification or reprocessing.
Pay and switch to reimbursement: If time is critical, settle the bill upfront and collect all necessary documentation to file for reimbursement later.

How to file a reimbursement claim after cashless denial

Collect all treatment-related documents: Ensure you have original bills, discharge summary, prescriptions, investigation reports, and diagnostic results.
Submit the reimbursement claim form: Complete the insurer’s claim form accurately and attach all supporting documents.
Provide a cover letter: Explain that the cashless claim was denied and you are now applying for reimbursement. Mention the reasons given and your understanding of policy eligibility.
Keep copies and track: Retain photocopies of everything submitted. Monitor the claim status through the insurer’s app or customer support.

Most insurers allow 15 to 30 days post-discharge to file a reimbursement claim.

Escalation if your reimbursement claim is also denied

Grievance Redressal Officer: Contact the insurer’s internal grievance redressal officer. Every insurer must provide this escalation point as per IRDAI guidelines.
Insurance Ombudsman: If unsatisfied with the grievance response, you can file a complaint with the Insurance Ombudsman under the appropriate jurisdiction. There is no cost involved in this step.
IRDAI Complaint Portal (IGMS): You can lodge a complaint on the Integrated Grievance Management System of IRDAI for formal intervention.

While insurers are required to address grievances within 15 days, persistent follow-ups may be necessary.

Using claim settlement ratio to choose the right insurer

The claim settlement ratio in health insurance indicates the percentage of claims an insurer successfully settles versus total claims received. A higher ratio reflects a better chance of your claim being processed smoothly.

When purchasing or switching your cashless medical insurance plan, consider insurers with high claim settlement ratios. This metric, usually updated annually by IRDAI, reflects both reliability and customer service efficiency.

Also, check:

Turnaround time: How quickly does the insurer approve or deny a claim?
Cashless network: Are your preferred hospitals included?
Customer reviews: Do policyholders report frequent disputes or smooth experiences?

Selecting an insurer with a good track record can reduce the likelihood of denial and improve your overall claims experience.

How to avoid cashless claim denials in future

Pre-authorisation: Wherever possible, submit a pre-authorisation request 24–72 hours before planned hospitalisation.
Verify network hospitals: Check if your hospital is listed in the insurer’s approved cashless network.
Read your policy thoroughly: Be aware of inclusions, exclusions, and waiting periods.
Maintain accurate health records: Keep a record of past treatments and diagnoses in case the insurer requests verification.
Avoid non-disclosure: Always provide full and accurate health details when purchasing or renewing a policy.

Conclusion

A rejection of a cashless medical insurance claim can be stressful, but it is not the end of the road. By understanding the cause of denial, taking immediate corrective steps, and utilising the reimbursement route effectively, you can still recover your medical expenses. Additionally, choosing an insurer with a strong claim settlement ratio in health insurance ensures that you are better supported during emergencies.

Being informed and proactive is key to navigating claim denials and safeguarding your health and finances.