Come August 1, health insurance companies must have a system ready to provide clients with 100 per cent cashless health claim settlements services. The Insurance Regulatory and Development Authority (IRDAI) has asked insurers to set up a system for a complete cashless claim settlement process by July 31. The new IRDAI norms will come into force on August 1. Additionally, as per IRDAI’s May 29, 2024 guidelines, insurers must keep the reimbursement-based claim settlement cases to a minimum and are allowed only under exceptional situations.

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The new cashless claim settlement system is expected to streamline the claim settlement process, making it faster, smoother, and more convenient for policyholders. Under the new system, insurers are required to respond to a cashless authorisation request within an hour and provide final approval within three hours of receiving the discharge permission from the hospital. These strict timelines are designed to ensure prompt and efficient service. In the event of a delay, the insurer may be liable to pay charges, further incentivising adherence to the new system.

The new regulations came after there were complaints regarding claim settlements and delays. Insurers often reject insurance claims due to pre-existing health conditions, and even if they allow, it is only for a partial amount. According to the IRADI rules, insurers cannot reject claims without approval from the claims review committee. They must also provide policy details and terms and conditions if rejected. A 100 per cent cashless claim settlement process would be a boon for the policyholder. Earlier, they had to look for cashless hospitals for treatments or keep some cash handy in case the insurer backed out at the last moment.

New IRDAI Rules

As per IRDAI norms, insurers can provide policyholders pre-authorisation digitally. Also, “Insurers may arrange for dedicated help desks in physical mode at the hospital to deal and assist with the cashless requests,” reads the circular. In case of a policyholder’s death during treatment, the insurers must process the claim settlement request immediately without delay to ensure the policyholder’s family members do not need to wait longer to get the mortal remains.

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In the case of cashless claims, it will be the responsibility of the third party administrator (TPA) and the insurer to collect all the documents from the hospital for claim settlement. This action will bring more convenience to the policyholders and their family members in process claims.

Moreover, health insurance plans are portable, so if a policyholder is not happy with his plan, he can port his policy or change the insurer. The new insurer must complete the porting process within three days or 72 hours, and after that, it must inform the policyholder within five days about the policy coverage and benefits. All the benefits in the old policy, such as no claim bonus, waiting period, moratorium period, etc., will be automatically transferred to the new policy.