Health Insurance Claim Process: Cashless, Reimbursement and What to Do If It’s Rejected

The Short Answer

The health insurance claim process in India runs on one of two routes. In a cashless claim, you are treated at a network hospital and the insurer pays the hospital directly. In a reimbursement claim, you pay the hospital yourself and the insurer pays you back after reviewing your bills.

Since IRDAI’s Master Circular on Health Insurance of 29 May 2024, insurers must decide a cashless request within one hour and give final discharge approval within three hours of the hospital’s request. No claim can be rejected without approval from the insurer’s Claims Review Committee. And if a claim is wrongly rejected, you have a free, three-step escalation path that ends with the Insurance Ombudsman.

Most claim disputes are not decided in the hospital. They are decided by what was written on the proposal form, and by whether the insurer was told in time.

Most claims are not lost at the hospital desk. They are lost on the proposal form, years earlier.

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Two Routes

Cashless vs reimbursement: what is the difference?

Both routes pay for the same treatment under the same policy terms. What changes is who pays the hospital first, and who does the paperwork.

	Cashless	Reimbursement
Hospital	Must be in the insurer’s network	Any qualifying hospital
Who pays the hospital	Insurer, directly	You, then the insurer repays you
Paperwork	Hospital and TPA/insurer handle it	You file the claim and documents
Key timeline	1 hour to authorise; 3 hours for discharge	30 days from the last necessary document (45 if investigated)
What you still pay	Non-payables, co-pay, deductions above limits	Same, deducted from the payout

Cashless is usually the better experience, because you do not have to arrange a large sum at short notice. Reimbursement is the fallback when the hospital is outside the network, when cashless is denied at admission, or when you choose a hospital the insurer does not tie up with.

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Route 1

The cashless claim, step by step

1. Check the network. Confirm the hospital is in your insurer’s current network list, on the insurer’s website, app or TPA helpline. Lists change, so check before a planned admission, not after.
2. Intimate the insurer. For a planned admission, inform the insurer or TPA in advance, as your policy specifies (often a few days before). For an emergency, inform them as soon as possible after admission, within the window in your policy wording.
3. Pre-authorisation. The hospital’s insurance desk sends a pre-authorisation request with your health card, ID and the doctor’s notes. The insurer must decide immediately, and within one hour.
4. Treatment. If the stay runs longer or costs rise, the hospital asks for an enhancement of the approved amount.
5. Discharge. The hospital sends the final bill. The insurer must grant final authorisation within three hours of that request. You pay only the parts the policy does not cover.

Two rules from the 2024 circular matter here. First, if the final authorisation takes longer than three hours and the hospital charges extra for the delay, the insurer must bear that amount from its shareholders’ funds, not from your sum insured. Second, insurers and TPAs are directed to collect the claim documents from the hospital themselves rather than asking you for them. In the unfortunate case of death during treatment, the insurer must process the claim immediately so the body is released without delay.

A cashless request can be denied at admission, usually because the documents are incomplete or the insurer needs more information. A cashless denial is not a claim rejection. You can still pay, then file for reimbursement with the full paperwork.

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Route 2

The reimbursement claim, step by step

1. Intimate the insurer about the hospitalisation within the time your policy specifies, even though you are paying yourself.
2. Pay and collect everything at discharge: original bills, receipts, the discharge summary and reports (the list is below). Ask the hospital for itemised bills, not just a total.
3. File the claim with the claim form and documents within the deadline in your policy (commonly 15 to 30 days after discharge). Keep copies and a submission acknowledgement.
4. Respond to queries quickly. If the insurer asks for anything more, the clock for settlement runs from the last necessary document, so delays on your side delay the payout.
5. Receive the decision. The insurer must settle or reject within 30 days of the last necessary document. If it decides to investigate, it must finish the investigation within 30 days and settle within 45 days.

If the insurer misses these deadlines, it owes you interest at 2% above the bank rate from the date it received the last necessary document. Pre- and post-hospitalisation expenses (tests before admission, medicines after discharge) are usually claimed through reimbursement too, within the days your policy covers.

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The Paperwork

Documents you need for a health insurance claim

For a cashless claim, most of this moves between the hospital and the insurer. For a reimbursement claim, this is your checklist:

• Duly filled and signed claim form
• Policy number or health card, and a photo ID of the patient
• Discharge summary from the hospital
• Original final bill, with an itemised break-up, and payment receipts
• Investigation reports (blood tests, scans) with the doctor’s prescriptions advising them
• Pharmacy bills with the matching prescriptions
• For an accident: the medico-legal certificate or FIR, where applicable
• A cancelled cheque or bank details for the payout (NEFT)

The discharge summary is the single most important document. It records the diagnosis, the history of the illness and the treatment given, and it is the first thing a claims doctor reads. Check it before you leave the hospital. If it records a history of the illness (“known case of diabetes for 6 years”) that you did not disclose when buying the policy, expect questions.

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Why Claims Fail

Common reasons health insurance claims are rejected

According to IRDAI data placed before Parliament, insurers repudiated about 11% of health insurance claims by number in FY 2023-24. The reasons are rarely mysterious. In order of how often they cause disputes:

1. Non-disclosure of a pre-existing condition

If you had a condition when you bought the policy and did not declare it, the insurer can reject a related claim, and in some cases cancel the policy. This is the biggest single cause of disputes. The protection is the moratorium: after 60 continuous months of cover, a claim cannot be contested on grounds of non-disclosure or misrepresentation, except for established fraud.

2. Claim within a waiting period

Pre-existing diseases (up to 36 months), specified illnesses such as cataract or hernia (often 24 months), and the initial 30-day waiting period for illnesses all block claims while they run. These are in your policy schedule.

3. Exclusions and non-medical hospitalisation

Treatment that is excluded by the policy, admission only for tests with no active treatment, or a stay the claims doctor considers medically unnecessary. Day-care procedures are covered without 24-hour admission, but ordinary OPD treatment usually is not.

4. Documentation gaps or mismatches

Bills that do not match prescriptions, dates that do not line up, or a missing discharge summary. These are usually fixable, so respond to the query instead of giving up.

5. Policy not in force

A lapsed policy, or treatment that began before cover started. Renew before the due date, and treat the grace period as a safety net, not a plan.

A partial payment is different from a rejection. Room-rent limits with proportionate deductions, sub-limits, co-pay and non-payable items (gloves, admission kits and the like) reduce what you receive even on an approved claim. We explain each of these in how to choose health insurance.

Whatever the reason, the 2024 circular says no claim can be repudiated without the approval of the insurer’s Claims Review Committee, and the rejection letter must give the specific reason with reference to the policy terms. A one-line rejection is not good enough. Ask for the clause.

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If It Goes Wrong

What to do if your claim is rejected or short-paid

Step 1: Read the letter, then write to the insurer

Identify the exact clause cited. Then file a written complaint with the insurer’s Grievance Redressal Officer (GRO), attaching your policy, the rejection letter and any medical evidence that answers the reason given, such as a doctor’s certificate on when a condition began. Insurers must acknowledge a complaint and resolve it within 14 days.

Step 2: Escalate on Bima Bharosa

If the insurer does not reply or you are unhappy with the reply, register the complaint on IRDAI’s Bima Bharosa portal (bimabharosa.irdai.gov.in). It is linked to insurers’ complaint systems, so the insurer sees it at once and the regulator can track it.

Step 3: Approach the Insurance Ombudsman

Bima Bharosa does not forward complaints to the Ombudsman automatically, so this step is yours to take. You can approach the Insurance Ombudsman (Bimalokpal) if the insurer has rejected your complaint, or has not replied within 30 days. File within one year of the insurer’s final reply. The process costs nothing and needs no lawyer. Awards are normally passed within three months of receiving all documents, and the insurer must comply within 30 days, or pay you a penalty of ₹5,000 for every day of delay.

The consumer commission remains open as an alternative for larger or more complex disputes. A clear paper trail from the first two steps strengthens your case wherever you take it.

Questions

Frequently asked questions

How long does a cashless health insurance claim take?

Under IRDAI’s 2024 Master Circular, the insurer must decide on cashless authorisation immediately and within one hour of the hospital’s request, and give final authorisation at discharge within three hours. If the hospital charges extra because the insurer took longer than three hours, the insurer must pay that amount.

How long does a reimbursement claim take to settle?

The insurer must settle or reject it within 30 days of receiving the last necessary document. If it investigates, it gets up to 45 days. Delays beyond that attract interest at 2% above the bank rate.

Can I claim reimbursement if my cashless request was denied?

Yes. A cashless denial only means the insurer did not approve direct payment at that stage. You can pay the hospital and file a reimbursement claim with complete documents; it will be assessed on the policy terms.

I have two health policies. Which one do I claim from?

You choose. The 2024 circular lets a policyholder with multiple policies decide which policy to claim under. If that policy does not cover the full amount, the balance can be claimed from the other policy.

Can an insurer reject my claim after several years?

Once you have 60 months of continuous cover, the moratorium applies: the claim cannot be contested on grounds of non-disclosure or misrepresentation, except for established fraud. Normal policy terms such as exclusions and sub-limits still apply.

Does it cost anything to complain to the Insurance Ombudsman?

No. Complaining to the Insurance Ombudsman is free and you do not need a lawyer. You must first complain to the insurer, then file within one year of its final reply (or after 30 days if it has not replied).