A cashless policy, which is the norm now in health insurance, is a policy where the insurer settles the claim directly by making the payment on behalf of the insured. A reimbursement policy, on the other hand, requires you to pay for all the expenses yourself first and later reimburses the expenses.
How do cashless policies work?
Your health insurance policy will have a network of hospitals across the country. If you get hospitalized in one of the network hospitals, your policy automatically becomes cashless. In other words, at the time of hospitalization, you just need to show your health insurance card and do not need to pay anything.
This card contains the number of your third-party administrator (TPA)—he works as an intermediary between you and the insurer and helps settle claims—or of the insurer in case they settle the claim in-house or without the help of TPAs. The hospital authorities will fill up the authorization form with an interim cost structure based on initial diagnosis and treatment recommended and give it to the TPA.
If your authorization is approved, you will not need to shell out a dime as all insurable costs will be covered. But if the authorization is rejected, you will need to foot the bill yourself and take it up with your TPA directly later.
How do reimbursement policies work?
But when you do not go to one of the hospitals that’s empanelled with the insurer, you would usually end up paying hospital bills yourself. But you can produce the bills later and get them reimbursed. For this, you need to get in touch with the TPA or the insurer and produce relevant documents. These documents include the discharge summary, doctor’s prescriptions, diagnosis reports and hospital bills. It is advisable that you get in touch with the TPA immediately as most insurers require you to inform them within 30 days of incurring the cost.
What should you do to ensure smooth claim settlement?
On the face of it cashless process looks very smooth, but it is marred with several administrative glitches. Even as you can’t control what happens at the TPA end, being prompt can make matters easier for you. In case of a planned hospitalization, the process of getting the authorization approved can be initiated in advance. The authorization is valid for 15 days to a month, so it pays to start the process early. Store the TPA’s number and keep your family in the loop about it as it helps to get directly in touch with the TPA during emergencies.