Cashless Hospitalisation: How It Works, Process & Benefits

According to a reputable credit rating agency in India, the country’s spending on healthcare is likely to spike from 3.3% of India’s total income (GDP) to 5% by the year 2030. Having said that, a medical emergency, out of the blue, may burn holes in your pocket. However, relax!

With cashless hospitalization, you can avail of quality medical care at the best healthcare facilities without worrying about upfront payments. It ensures that your insurance provider directly settles your hospital bill while reducing your financial and emotional load during tough times.

So, let’s find out how cashless hospitalization works!

What is Cashless Hospitalization?

Cashless hospitalization is a service you can use under your health insurance policy. With this facility in place, you are eligible to get medical treatment without having to pay out of pocket at the time of hospitalization. Instead, your insurance partner will directly settle the bill with the hospital.

This service is available only at hospitals that are part of your insurer’s cashless hospital list, also known as empanelled or network hospitals. These hospitals have tie-ups with your insurance provider or a TPA (Third-Party Administrator), where treatment costs are often governed by PPN rates in health insurance.

How Cashless Hospitalization Works?

Here’s a step-by-step guide to help you understand how the cashless claim process works in India:

1. Choose a Network Hospital
   Before getting admitted to a hospital, check if the same is on your insurance company’s cashless hospital list.
   You can find this list on your insurer’s website or mobile app. Or else, you can call their customer care or TPA helpline.
2. Fill out the Pre-Authorization Form
   Once you have come to a network hospital, go to the insurance help desk and show your health insurance card or policy papers. Now, fill out a cashless pre-authorization form with your medical and policy details.
   The hospital will send this form to your insurance company or TPA for approval.

Note: Without pre-authorization, you will not be able to use the cashless facility.

1. Claim Approval by TPA or Insurance Company
   The TPA or insurer will check your documents. For planned treatments, they typically respond within a few hours. For emergency cases, it may take up to 24 hours. If your claim is approved, the hospital is notified, and you can receive treatment without paying upfront. What if your claim is rejected? Don’t worry! You can still get treatment by paying yourself. For reimbursement, you can apply later on.
2. Treatment and Final Bill
   After the treatment is done, the hospital will send the final bill to the insurer or TPA. If everything is within your policy coverage and the documents are fine, your service provider will pay the hospital directly.

Who Is Eligible for Cashless Hospitalization?

Cashless hospitalization is generally available to policyholders with an active health insurance policy that includes cashless treatment benefits. The treatment must usually be taken at a network or empanelled hospital associated with the insurer or TPA.

Both planned and emergency hospitalization may be eligible for cashless treatment, subject to the policy terms, coverage limits, waiting periods, and pre-authorisation requirements.

For planned treatment, the policyholder generally needs to obtain pre-authorisation before admission. In an emergency, the hospital or policyholder should inform the insurer or TPA as soon as possible and follow the applicable notification process.

Cashless hospitalization process may not be available if the policy is inactive or lapsed, the treatment is excluded, the waiting period has not been completed, or treatment is taken at a hospital that is not part of the insurer’s network. Checking the network hospital before admission can help policyholders understand whether cashless treatment is available.

What is the Difference Between Planned & Emergency Hospitalization?

Refer to the table below for a clear insight into the difference between planned and emergency hospitalization:

Feature Planned Hospitalization Emergency Hospitalization

Occurrence It refers to the treatments or surgeries you have scheduled in advance It can cause sudden health issues like accidents, heart attacks, or serious illness, requiring hospitalization.

Examples Cataract surgery, joint replacement, scheduled tests, etc. Road accidents, stroke, high fever, and food poisoning

Hospital Selection Choose a network hospital from the cashless hospital list of your insurance provider Visit the nearest network hospital available

Claim Process Time Start 3 to 4 days before admission Start within 24 hours after getting admitted.

Common Reasons Why a Cashless Hospitalization Request Gets Rejected

A cashless hospitalization request may be rejected or delayed for several reasons. Understanding the applicable policy conditions can help policyholders reduce the chances of unexpected claim issues.

Treatment Not Covered Under the Policy

If the treatment or medical procedure is excluded under the health insurance policy, the cashless request may not be approved. Policyholders should review their policy coverage before planned hospitalization.

Waiting Period Restrictions

Some illnesses, treatments, or pre-existing conditions may have applicable waiting periods. If the required waiting period has not been completed, the treatment may not qualify for cashless coverage.

Treatment at a Non-Network Hospital

Generally speaking, cashless treatment is possible only through network or empaneled hospitals. However, in case treatment is taken from a non-network hospital, the policy holder will have to pay the hospital in person and claim reimbursement subsequently based on the policy terms.

Incomplete or Incorrect Documentation

Any error in the details of the insurance policy or any kind of insufficient information provided in the pre-authorization form or medical report form may result in delays or problems with the processing of claims.

Policy Lapse or Inactive Coverage

If the health insurance policy has expired or is otherwise inactive at the time of hospitalization, cashless treatment may not be available.

Policyholders can learn more about cashless claims in health insurance to understand the claim process and requirements.

How to Minimise Rejection Chances

It is important for policyholders to minimize chances of denial by maintaining their policy. They need to review coverage and waiting periods, choose a in-network hospital, notify the insurance company/TPA on time, and provide all required documentation correctly.

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Expenses Not Covered Under Cashless Hospitalization

The absence of cash in a cashless hospitalization process does not imply that every cost associated with the treatment will be borne by the insurer. The extent of payment is influenced by the terms of the insurance, the sum insured, and other related conditions.

Consumables and Non-Medical Expenses

Certain consumables and non-medical items may not be covered under a health insurance policy. These expenses may therefore need to be paid by the policyholder even when the main hospitalization claim is approved.

Administrative Charges

Some of the administrative charges may not be within the scope of the policy cover. Payment of such expenses will depend on the terms of the policy and the hospital’s billing conditions.

Personal Comfort Expenses

Personal expenses or expenses related to personal comfort items which are not medically necessary may not be part of the costs of insured treatment. They can be out-of-pocket expenses for the policyholder.

Exclusions under the Terms of the Health Insurance Policy

A cashless hospitalization health insurance policy may exclude some treatments, procedures, medical conditions, and expenses. Such an excluded treatment and expenses may not be covered under the cashless facility.

Why Policyholders May Still Have Out-of-Pocket Expenses

Even when a cashless claim is approved, policyholders may have to pay expenses such as deductibles, co-payments, non-covered items, expenses exceeding policy limits, or other amounts not included under the policy. Choosing a suitable network hospital can simplify the cashless process, but it does not automatically mean that every hospital expense will be covered.

What Role Does a TPA Play?

A TPA (Third-Party Administrator) is a company that helps your insurance company and the hospital work together during a cashless claim. They take care of important steps like:

• Checking your documents
• Getting pre-authorization
• Settling the hospital bill with the insurer

Some insurance companies now handle these steps in-house, but many still utilize TPAs to streamline and expedite the process.

Note: Always keep your TPA helpline number handy and verify that your health insurance card includes TPA details.

What Documents are Required for Cashless Claims?

To ensure a smooth cashless claim process, keep the following documents ready:

• Health insurance ID card or policy copy
• Aadhaar card or any other government ID proof
• Doctor’s prescription for admission
• Pre-authorization form
• Discharge summary
• Final hospital bill
• Diagnostic reports
• Pharmacy bills (if needed)

A Quick Comparison Between Cashless Claim and Reimbursement Claim

Let’s take a quick look at the differences between the cashless and reimbursement claim processes:

Knowing how to file a Reimbursement Claim Under Health Insurance can help policyholders who cannot use the cashless facility. However, this is subject to the policy terms and claim requirements.

Common Mistakes to Avoid in the Cashless Claim Process

The following mistakes you need to steer away from when it comes to making a cashless claim:

Bottom Line

In India, cashless hospitalization has made it much easier to get quality treatment without the pressure of arranging money during medical emergencies.

By understanding how the TPA cashless claim system works, checking the cashless hospital list in advance, and following the right cashless claim process, you can fully benefit from your health insurance policy.

Even if you’re treated at a non-network hospital, don’t worry—your insurer may still support you through the reimbursement process, helping to keep your savings intact. Health emergencies come without warning, but with the right information and guidance from a trusted health insurance advisor, you can be better prepared when it matters most.