Cashless Hospitalization – How It Works and What You Should Know

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 empaneled or network hospitals. These hospitals have tie-ups with your insurance provider or a TPA (Third-Party Administrator).

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.

3. 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.

4. 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.

Read more: How to File a Reimbursement Claim Under Health Insurance?

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:

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:

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:

The 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.