Summary of this article
Undisclosed illnesses, exclusions remain common claim rejection reasons
Documentation mismatches between hospital records can delay approvals
Non-network hospitals: delayed insurer notification may trigger denial
Short hospital stays, experimental treatments often excluded from cover
The primary reasons health insurance claims may be denied include failure to state pre-existing conditions, exclusions in a policy, and many minor, lesser-known related issues. These are rather obvious things, and so it is important to exclusively state pre-existing conditions and also check for exclusions. Anything that is excluded is mentioned clearly in the policy document and is not covered.
However, there are more uncommon reasons for claim rejection. Let us take a look at some of those.
Why Minor Discrepancies Cost Claims
A problem that almost all policyholders do not consider before submitting their claim is the presence of mismatched or incomplete documentation.
“Minor differences between hospital records, diagnosis codes, and patient information can substantially impact the timely and proper approval of a health insurance claim,” says Arun Ramamurthy, co-founder, Staywell.health. So, it is important to maintain soft copies of all relevant documents from authorized health authorities.
Why Hospital Eligibility Matters
An additional reason that claims may be denied is due to the treatment being at a non-insured (registered) provider or facility. An example of this would be a small town in which the insured does not realize that the clinic where he/she seeks treatment does not satisfy the minimum requirements set out by that particular insurer or applicable regulatory agencies.
So, it is always important to check if the hospital is a network hospital. Irdai rules say that even non-network hospitals should offer cashless treatment, but that may not always be the case.
Why Timely Notification Matters
“Timely notification to the insurer or third-party administrator (TPA) is critical; failure to do so, especially in the case of an admission for a procedure that requires planning (i.e., arranged in advance), may prevent the approval of a timely claim,” says Ramanamurthy. For planned procedures, the notification needs to happen 48-72 hours before admission, and for emergency cases, 24-48 hours after admission.
The Minimum Stay Clause
Other claims may also be denied due to short hospitalisations, since a very short hospitalisation may not satisfy the minimum period of time required for a health insurance claim.
An outpatient treatment that does not satisfy the criteria for covered daycare procedures may also lead to a denial, even though the treatment was medically required. Such cases may require outpatient department (OPD) coverage to be covered.
Experimental Treatments Excluded
“Further, health insurers typically will not reimburse for medications used in experimental treatments, treatments for which there is a limited medical evidence base, or treatments that do not satisfy common standards used by medical professionals,” says Ramamurthy.
However, these will be explicitly mentioned in the policy document, so it is important to read the policy document thoroughly.
