IRDAI’s push for easier discharge authorisation, faster cashless settlement

Making health insurance claims and having them settled is rarely a smooth affair for policyholders. In social as well as mainstream media, and in many public forums, there are tales of how claims are delayed, cashless settlement is a rough ride and hospital discharges are inordinately delayed.

In a move to streamline process and smoothen the ride for policyholders, the insurance regulator IRDAI came out with a new circular late last month.

A host of issues are addressed in the circular. In particular, we look at a few key moves that are quite helpful to health insurance customers.

Shortening of timelines on approval of cashless settlements, quicker authorisation of hospital discharges, streamlining of claim settlement and simplifying the task of dealing with multiple insurance policies are some aspects that the IRDAI circular covers. We explain these parts so that policyholders can be well-informed during any hospitalisations.

Quick turnaround on claims

The IRDAI has asked insurers to try and ensure 100 per cent cashless settlement as far as possible in most cases. In fact, it has stated in the circular that the cases where reimbursement is necessitated must be kept to the bare minimum.

In particular, the regulator has mandated insurance companies to issue authorisation immediately after being requested or utmost within one hour. The systems and processes for the same are to be set up by July 31 of this year. Dedicated physical helpdesks are sought to be provided in association with the hospitals. IRDAI has asked insurers to provide pre-authorisation to health insurance policyholders via digital means, so that admission and claim settlement are smoother.

The next important diktat pertains to discharge of patients after treatment. Many times, even after the treatment period gets over and the patient is ready for discharge, there is an inordinate delay in actually going through with the process. The key reason for this is the delay on the part of insurers in giving the go-ahead or final authorisation even after being notified of the discharge.

As a result, there are cases where the patient is made to wait for several hours and even overnight. To make matters worse, this excess stay of many hours is charged by the hospital, which adds to the overall bill of the patient.

To put an end to such practices, the regulator has asked insurers to give final authorisation within three hours of the receipt of discharge notification or authorisation from the hospital.

Also, the IRDAI has stated that in case an insurance company takes more than three hours to give the final authorisation, it has to bear the additional expenses that the hospital charges patients for the unplanned stay.

So, no more endless waits for patients at the hospital looking to get the go-ahead from insurers.

In the unfortunate event of the death of a policyholder, the insurance company concerned must immediately take the case for settlement, according to the regulator, and also ensure the mortal remains are released from hospital as soon as possible.

Smoother settlement

The IRDAI has specified an important procedural factor in claim settlement. It has mandated that no claim can be rejected without the approval of the product management committee (PMC) or a three-member sub-committee of the PMC, called the Claims Review Committee. So, no ad-hoc rejection of claims is allowed without a team going into its merits.

Another key point mandated by the regulator is that in case a claim is intimated, it is the responsibility of the insurer and third party administrator to collect all the relevant reports and documents from the hospital. The policyholder need not collect and submit these documents to the insurer. This move gives considerable relief from having to run around for getting all medical reports and bills for submission.

Another key regulatory development pertains to those having multiple health insurance policies from different companies. This is for indemnity policies such as the regular health insurance covers.

Policyholders can choose one insurer from the ones they have and notify them in case of hospitalisation. This insurer chosen for claim settlement is called the primary insurer by the regulator.

If the cost of treatment is more than what the primary insurer’s policy offers, you can tap the other insurers to settle the amount in full. The good part here is that the IRDAI has said that the primary insurer will itself seek the details of other policies and coordinate with the other insurance companies for claim settlement, without causing any trouble to the policyholder.

Overall, the insurance regulator has batted for the common policyholder in making companies more friendly and flexible while authorising and settling claims.