Why your health insurance claims may be rejected

It is harrowing enough to be hospitalised for any illness for prolonged periods of time. The only relief, if at all, comes from the belief that the health insurance policy taken for such treatments would cover all the hospital charges by accepting the claim made.

However, what if you find that the claim is rejected completely or only a portion of the hospital bill is accepted for payment by the insurer?

While there may be the odd case where the insurance company may have made a mistake, there is also a good chance that oversight on the policy specifics from your side could have resulted in a complete rejection or part settlement of claims.

And there are many reasons why claims could be rejected by your insurer. Read on for the specifics on this aspect so that you remain aware of key reasons for the insurer declining full settlement of hospital bills.

Non-disclosure of ailments

When you apply for a health insurance policy, you are expected to come clean on all your existing diseases and medical conditions. In case you hide a few facts fearing that a policy may not be issued by the insurance company, you are only making matters worse.

When you make a claim after hospitalisation and it is found that your present ailment is linked to a pre-existing disease — this is known by perusing the medical records submitted — that was not disclosed at the time of application, it will be rejected.

Always make clean disclosures of diseases and even if there are none at the time of applying and you develop a medical condition that may require treatment later (cholesterol, blood pressure, diabetes, etc.), it is better to disclose it immediately to the insurer.

Disregarding waiting periods

In the point about pre-existing illnesses mentioned earlier, there is a key related factor. Most pre-existing ailments have a waiting period as specified by the insurance company. This timeframe could be two or three years. Any claim made before the waiting time expires would be rejected by the insurer even if you had disclosed it fully during the policy application stage.

There are also specific medical conditions or situations that have a specified waiting period. This could be from a few months to a few years. For example, maternity coverage may not be available from day one of taking insurance with most companies and will have a waiting time of 2-3 years.

Critical illnesses will have a 90-day waiting period at least.

Some insurance companies do allow you to reduce the waiting period by paying additional premiums.

Intimation delays

In as much as the insurance desk at the hospital you get admitted is likely to be helpful with the paperwork, it is better to be prepared well in advance.

All pre-planned hospitalisations must be informed to the insurance company or third party administrator a day or two before admission so that all authorisations are in place for smooth claim settlement.

In the case of emergencies, you or your near ones must inform the insurer within 24 hours of hospitalisation.

Failure to comply with these timelines may lead to claim rejection, part payment or delays in settlement. Even reimbursements may not be allowed in case of inordinate or inexplicable delays.

Treatment at non-network/blacklisted hospitals

All health insurance companies have a list of network hospitals where cashless settlement is extended for treatment taken in most of the cases.

If you decide to take treatment in a non-network hospital, the settlement may not be smooth. For one, cashless settlement will usually not be given in non-network hospitals. After careful examination of claims and documents, the insurance company may offer reimbursement, part settlement or reject the claim.

In case the hospital happens to be blacklisted by the insurer, then the claim is sure to be rejected. It is better for policyholders to always have a list of network hospital in all situations and suitable locations (near place of residence, office, places frequented, etc.) so that admission can be taken even during emergencies.

Other factors at play

Apart from the above reasons, claims can also be rejected for taking treatment for completely excluded cases such as dental, cosmetic, rejuvenation, etc.

Improper/insufficient/incomplete or worse, fake documentation on doctor prescriptions, hospital bills, diagnostic reports and disposables will also lead to rejections.

Wrong diagnosis or line of treatment at the hospital, incorrect disclosures on personal details and exhaustion of sum insured, lapsed medical policies are other reasons for claims being disallowed by insurance companies.