Types of Health Insurance Claims: Cashless Vs Reimbursement Claims

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Types of Health Insurance Claims: Cashless Vs Reimbursement Claims

Claim settlement is one of the most crucial aspects of a medical insurance plan. When an unfortunate event befalls the policyholder, they will expect the insurance provider to provide prompt assistance.

Acknowledging this, insurance providers constantly try to improve their claim settlement process to make it as smooth as possible.

However, for an insurance company to respond speedily, the policyholder must acquaint themselves with claim settlement procedures. Knowing the different types of health insurance claims is one way of accomplishing this.

What are Health Insurance Claims?

The process through which an insurance holder raises a request to the insurance company for funds is referred to as the claim settlement process.

This claim can be raised when the insurance holder needs money to secure treatment for any major or minor illness or any other medical condition as listed under their health insurance. The health insurance claim can also be raised to avail of any of the services offered under the medical insurance plan.

To get a claim approval, the insurance holder is expected to share all the details regarding the medical expenses and submit the supporting documents. Once the claim is raised, the insurance company analyses and approves it. Policyholders can also raise their health insurance claims online.

There are essentially two types of health insurance claims: cashless and reimbursement. Knowing the claim types in healthcare can ensure you have a seamless claim settlement experience. With that in mind, let us understand cashless and reimbursement claims.

What is Cashless Medical Insurance?

Cashless medical insurance is a type of claim settlement procedure wherein the insured member can receive treatment in any hospital across the country without the need to make any out-of-pocket payments. Instead, the medical expenses are directly settled between the hospital and the insurance provider.

To avail of this convenient process, the policyholder only needs to visit a hospital of their choice. Here, they can simply present their health insurance card and proof of identification.

It is important to note, however, that it is important to obtain prior approval from your insurance company in the prescribed format. In case of planned hospitalisations, this must be done at least 48 hours before admission. In case of emergencies, approval must be sought within 48 hours after the time of admission.

Once the medical treatment is completed, the claim forms will have to be shared with the third-party administrator who acts as an intermediary between the hospital and your insurance provider. From there, the insurance provider takes over and takes care of your medical bills.

What is Reimbursement in Insurance?

When you seek reimbursement in insurance, you can receive treatment in any hospital but you will have to bear the initial cost and then raise a claim with your insurer to get the expenses reimbursed.

To initiate this process, the policyholder will need to submit all the relevant documents including:

Claim form: Duly filled claim form that can be found on the website of your insurance provider.

Medical certificate: This is a statement issued by an authorised doctor describing the status of your health.

Diagnosis report: A diagnostic report can include the test reports that the doctor has prescribed for the patient.

ID proof: Any valid ID proof of the patient can be submitted such as their PAN card, Aadhar card, driver’s licence, etc.

Discharge card: The discharge card will include information about the patient’s cause of hospitalisation and proof of their release.

Bills and prescriptions: All the bills and prescriptions issued throughout the medical process.

FIR: In case of an accident, the incident will have to be reported to the police and a copy of the FIR will have to be shared with the insurance company

Once all the aforementioned documents are shared with your insurance provider, they will analyse and validate your claim before settling it.

Now that we understand the different claim types in healthcare, let us take a look at the difference between cashless and reimbursement.

Difference Between Cashless and Reimbursement Health Insurance Claims

Factors Cashless Claims Reimbursement Claims
Definition You visit a hospital and the medical bills are settled directly between the insurance company and the hospital The medical cost is borne upfront and the bills are shared with the insurer for approval and settlement
Claim process The insurance company needs to be notified in advance  A reimbursement claim is filed post-treatment by sharing the necessary documents with the insurer
Claim settlement Treatment expenses are settled directly by the insurer within the policy parameters The policyholder first pays the hospital bills and then raises a claim for reimbursement 
Approval  For planned hospitalisation, the insurer must be notified 48 hours in advance and within 48 hours of being admitted in case of an emergency No prior approval is required for claim settlement
Processing time Quicker when compared to reimbursement claims May take time as the claims need to be processed and analysed before the settlement
Documents Need to fill out the form given by the TPA All essential medical documents such as medical bills, prescriptions, diagnosis reports, etc. will need to be submitted 

Observing the above table, one can deduce that in a comparison between cashless vs reimbursement, the former is better as it is more convenient. This can be a significant advantage as medical emergencies already cause a lot of distress for the patient and their family.

Considering this scenario, it is always preferred to not be worried about having to pay the medical bills. However, the reimbursement claim can also be a seamless process when all the necessary documents are submitted. In the end, the cashless vs reimbursement argument is largely about convenience.

The Bottom Line

A health insurance plan is designed to share the burden of the insured member in distressing times. Therefore, it offers more than mere financial assistance. However, all of this boils down to the ease of the claim settlement process.

With Tata AIG, you can not only enjoy a quick, transparent, and convenient claim settlement process but can also compare health insurance plans from us to choose the plan with the most suitable coverage for your insurance needs.

Disclaimer / TnC

Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.

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