Going the cashless route for health insurance isn't truly hassle free

The hassles: It's available only at network hospitals, and even there, all claims may not get paid

With digitisation becoming a buzzword, insurance companies are aggressively promoting their cashless features. In line with this trend, Max Bupa Health Insurance recently reduced its pre-authorisation to 30 minutes.

"The pain point for customers is that at the time of hospitalisation, they are left worrying about the claim and financial arrangements. People may not have money for the hospital deposit. Cashless offers this. From the time the patient sends us the request, it takes us 30 minutes to tell him or her whether the claim will be paid or not," says Anika Agarwal, head of marketing, Max Bupa Health Insurance.

Does it solve the problem for someone who has a cashless policy and is seeking urgent treatment? Most likely, not. The reimbursement option has been criticised because it is extremely tedious and requires the submission of original documents of all reports and bills, answering queries from the insurance company and subsequent follow-ups. Choosing the cashless method was supposed to have reduced these glitches.

"Cashless feature was introduced with two objectives. One is that the customer need not use his money. And two, to reduce frauds. In reimbursement, where the customer first pays and then gets the money back from the insurance company, there were a lot of frauds due to the nexus between the hospital and the customer. This used to cause loss to insurance companies and so they came up with cashless," says Atrey Bhardwaj, category head-general insurance, BankBazaar.com.

But things haven't changed dramatically. Insurers have put enough caveats to make them difficult to be used. For one, the cashless option is only available in network hospitals. Once you go to the network hospital with the insurance card and know-your-customer documents, the third-party administrator desk at the hospital will submit documents, reports, application forms etc to the insurance company. After verifying the details, the insurance company gives its approval for the claim. This process takes anywhere between 30 minutes to two hours.

All cashless claims may not get paid. If there are some cases in which the insurance company has some doubt or there is a grey area, the insurer may want to investigate further. In such cases, the customer may have to opt for reimbursement even in a network hospital. "So, even if the claim is payable, the company may recommend the customer to go for reimbursement claim instead of the cashless route so that it can post facto investigate the claim," explains Mahavir Chopra, director (health, life and strategic initiatives), at insurance brokers Coverfox.com.

Then, there are many situations where the customer has to put cash upfront. Sometimes, pre-authorisation may be part of the sum assured. In emergency cases, hospitals may insist on payment upfront or some others may seek security deposit to be reimbursed once the insurer clears it. However, the real catch is that the patient cannot be discharged unless the final approval comes through. This can take two to three hours.

Cashless works well, at best, in a planned surgery because the patient has time to intimate the insurance company and get the approval.

However, experts say that even if your cashless claim is rejected, you must apply for reimbursement. There are chances that the insurance company may pay the claim after going through all the details post the treatment. "When we get the final papers, there is a lot more information. That data could reveal something that would tell us that it should be covered. So, even is cashless is rejected post conversation with the company, one should still submit the claim to the company," says Sandeep Patel, CEO and MD, Cigna TTK Health Insurance.

CASHLESS PAINS

• Not all cashless claims are approved even if they meet policy terms and conditions
• Policyholder may be asked to opt for reimbursement if insurer wants to investigate the line of treatment suggested
• Policyholder should apply for reimbursement even if cashless claim is rejected 
• Hospital may ask for security deposit at time of admission, but this is refunded once claim is approved