Health insurance claim rejected? Follow these steps for recourse

Having your health insurance claim rejected can be unnerving. After all, the very purpose of taking a medical policy is to protect oneself from all hospitalisation claims and bills.

But claim rejection is not an end in itself. There is recourse available, the procedures involved could be tedious.

First of all, it is important to understand the reasons for claim rejection in the first place.

For example, it could just be a rejection of cashless claim because you took treatment in a non-network hospital. Or, the rejection could be due to specific clauses in the insurance policy. The reason for the rejection would decide your next course of action.

Therefore, preparedness is required to deal with the issue of claim rejection – financial and procedural.

Follow-up action

In case of emergencies, there are chances that you may have taken treatment at a non-network hospital. If you opt for hospitalisation at a place that is not part of the insurer’s network, cashless settlement is not allowed.

If the non-network is not in the blacklisted category of the insurer, you may be allowed reimbursement of claims. You must have all the relevant documents, medical reports and bills with you to claim the reimbursement later.

Initiate the claim process within a few days of getting discharged from the hospital.

If it is a partial rejection of claim – full amount is not paid by the insurer – you must probe the reasons for the same. It could be due to room-rent ceiling of the insurer, and all expenses are prorated to the room rent.

Then there could be rejection of certain portions of the hospital bill such as consumables, pantry charges, certain administrative charges etc.

Finally, there are cases of outright rejection. Making claims during the waiting period, permanent exclusions from treatment, pre-existing ailments that may not have been declared, and other procedural aspects such as filling of claim forms inaccurately, claim not being filed within requisite timeframes etc.

There could also be the odd case of fraudulent claims as well.

Financial preparedness

In the case of reimbursement or rejection of claims, you will have to be prepared to pay the entire hospital bill amount.

Therefore, even while having a health insurance policy, you must have an emergency fund and preferably a medical corpus as well.

The emergency fund is for shielding you in case of loss of job or income. The thumb rule is to have 9-12 months’ monthly expenses.

On the other hand, a medical fund is exclusively for catering to medical conditions. The medical fund must be worth at least as much as your insurance sum assured.

In case you do not have a medical fund, you can tap into your emergency fund and replenish it as early as possible.

You can hold the medical fund in your savings account or fixed deposit with sweep-in facility so that you are in a position to withdraw easily when required.

Escalating claim rejection

In the case of partial rejection and reimbursement, there is little that you can do from your side.

However, if your case is genuine and the health claim has been rejected without assigning any proper reason, then you can escalate the issue.

If you do not receive a satisfactory response from your third-party administrator, you can take up the issue with the insurer directly.

Here, there are multiple levels that you need to deal with.

There are grievance officers with whom you can take up your issue. There are three levels of officers in an insurance company – two grievance officers and an ombudsman.

You can take up your rejection one after the other when there are no satisfactory responses.

But do not wait for too long while writing to these grievance officers. Escalate to the grievance officers within a week or 10 days. Then move the issue to the insurance ombudsman.

Usually, in genuine cases, these levels would suffice to get adequate redressal of your issue.

If the issue is still not resolved, you can escalate the claims problem to the insurance regulator, IRDAI.

In case your claim is still not honoured after going through all these stages, you can approach the consumer court and file a case against the insurance company.

All these procedures are time-consuming and you will have to be relentless in pursuing your case.