As a policyholder, you would never want to face a situation in which a health insurance claim is denied. Having you or your family member hospitalized is already stressful, and having the claim denied just adds to the stress. In this post, we will look at the top reasons why health insurance claims are rejected and what you can do as a policyholder to avoid them.
Reasons Why Health Insurance Claims Get Denied
The following are some of the most prevalent reasons why health insurance claims are refused.
Incorrect information: While filling out the health insurance policy application form, make sure that all of the information you enter is correct. There should be no intentional or unintentional distortion of any information, as this can result in claim rejection. It may sound silly, but most of the time, health insurance claims get rejected because of the wrong input of age, profession (especially if you are in a risky business, it is imperative to let the insurer know about it), hobbies (especially if you enjoy adventure activities such as hiking or scuba diving), etc.
All of the information shown above is relevant to the health insurance company's decision on whether to accept the health insurance policy application in the first place and, if yes, at what premium. You should fill out the application form yourself rather than having your agent or someone else do it. They may not have all of the necessary information on you to complete the form correctly.
Not disclosing the details regarding pre-existing illnesses and poor habits: Non-disclosure of information concerning one's own pre-existing illnesses or diseases, family history of illnesses, sedentary lifestyle, behaviours such as smoking, alcohol consumption, and so on might result in the rejection of health insurance claims. Some consumers may conceal this information to avoid paying a higher premium or having their insurance application rejected.
While filling out the health insurance policy application form, you must disclose any pre-existing conditions you may have. If a sickness runs in your family, include it in the family or medical history area. If you smoke, the insurance provider may inquire as to how many cigarettes you smoke per day. If you drink alcohol, you may be obliged to reveal the amount and frequency with which you consume it.
All of the information shown above assists the health insurance firm in accurately pricing the risk. If necessary, the insurance provider may insert an exclusion or a reasonable waiting period in health insurance for coverage of a certain pre-existing condition.
Filing a claim during the waiting period: Every health insurance plan may have waiting periods. A claim made during this waiting period in health insurance will be denied. Those who are unversed with the waiting period in health insurance must know the following details:
A 30-day waiting period: When a new policy is issued, there is a 30-day waiting period in health insurance in which no claims can be filed.
Maternity Waiting Period: If the policy includes maternity coverage, it typically becomes effective after a 24-36-month waiting period in health insurance. Also, the coverage may be limited to two pregnancies.
Waiting period for specific diseases or procedures: Treatment for specific diseases/procedures may be claimed after a 24-month waiting period from the policy's start. Some of these include cataracts, varicose veins, piles, and sinusitis. The insurance policy paperwork includes a detailed list of these diseases and procedures.
Waiting period for pre-existing illnesses: The claim for treatment for pre-existing conditions can be made after a 24-48-month waiting period from the start of coverage.
Waiting period for critical illnesses: The claim for treatment of any critical disease may be reimbursed after a 90-day waiting period from the policy's start date.
Please read the policy for further information on all of the above waiting periods in health insurance and how and when you can file a claim to prevent rejection.
Filing a cashless claim at a non-network hospital: If a cashless claim is submitted at a hospital which is not part of the insurance company's network, it will be denied. As a result, if you wish to file a cashless claim, ask the hospital before admission if it is a network hospital approved by your insurance provider. If you receive treatment at a non-network hospital, you will be entirely responsible to pay the hospital bill out of pocket. Later, you can make a reimbursement claim to your health insurance company.
Claims for services not covered: Some of the services are not covered by all the health insurance policies. They may be included in some policies with restrictions or other terms and conditions. If you file a health insurance claim for any of these services which are not covered, the health insurance company will deny it. Some of these services may include Dental therapy, AYUSH therapy, Outpatient Department (OPD) Services, and Maternity claims.
If you want to file a claim for any of the above, read your policy to see if it is covered. If they are covered, find out how much coverage they have and the terms and restrictions that apply.
Not reading the Exclusions carefully: Certain treatments and procedures may be deemed typical exclusions by all insurance companies. This implies that most plans will not cover them. Some of them might include Cosmetic/plastic surgery, Change in gender treatment, and medical treatment as a result of participating in hazardous or adventurous sports such as rock climbing, auto racing, horse racing, scuba diving, and gliding.
The above are some of the exclusions included in most health insurance policies.
Filing a claim for an amount that exceeds the sum assured: Every health insurance plan has a specific sum insured. What if the claim amount exceeds the remaining total insured (if you have already made claims in the same year)? The insurance company will authorize the claim up to the remaining sum insured, according to the policy terms and restrictions. With medical inflation rising each year, you should examine your health insurance coverage amount every few years. Purchase/upgrade to a larger coverage amount to stay up with medical inflation.
Not notifying the insurance company on time: If you do not notify the insurance company of your hospitalization within the specified time frame, the insurance company may reject your cashless treatment claim. If it is a scheduled hospitalization, you may obtain authorization prior to admission. If you are hospitalized in an emergency due to an accident or for any other reason, notify your health insurance company within 24 to 48 hours, as per policy terms.
Now that you have understood the top causes why health insurance claims are refused and what you can do to avoid them. Make sure you fill out the health insurance form yourself and provide accurate information. Once you've received the policy document, read all of the terms and conditions pertaining to the various waiting periods, network hospitals, exclusions, etc.