Cashless Claim Process — Pre-authorization, In-treatment, Discharge
How a cashless health claim moves through pre-authorisation, treatment and discharge, the time limits IRDAI sets for the insurer's decisions, and which parts of a hospital bill the patient still pays.
What cashless means
In a cashless claim the insurer settles the admissible hospital bill with the hospital, either directly or through its third-party administrator (TPA). The patient does not pay that part of the bill first and claim it back later.
Cashless is normally available at network hospitals, meaning hospitals that have an agreement with the insurer or its TPA. Some insurers extend the facility to other hospitals, so the policy and the insurer's current hospital list decide where it can be used. Elsewhere the patient usually pays and then claims reimbursement.
Cashless describes how the bill is paid, not how much is covered: the request is still assessed against the policy terms.
The three stages
Pre-authorisation comes first. At or before admission, the hospital's insurance desk sends the insurer or its TPA the proposed treatment and its estimated cost, and the insurer authorises an amount.
During treatment the authorised amount may prove too low, for example after complications or a longer stay. The hospital then sends an enhancement request asking for the authorised amount to be raised.
At discharge the hospital sends the final bill with a discharge request, and the insurer gives its final authorisation. The hospital collects from the patient only the part the insurer does not pay.
The time limits today
IRDAI's Master Circular on Health Insurance Business (29 May 2024) sets two clocks. The insurer must decide a cashless authorisation request within one hour, whether the admission is an emergency or planned. It must give final discharge authorisation within three hours of the hospital's discharge request.
If the final authorisation takes longer than three hours, the insurer bears any additional amount the hospital charges because of the delay. Older material quotes longer or tiered time limits, which are no longer the rule.
The same circular makes the insurer or its TPA, not the policyholder, responsible for collecting the required documents from the hospital in a cashless claim.
What the patient still pays
Cashless does not mean a zero bill. The patient pays the items the policy treats as non-payable, and any co-payment or deductible the policy sets. Insurers commonly treat some non-medical consumables, such as gloves and masks, as non-payable unless the policy or an add-on covers consumables.
Which items are non-payable differs from policy to policy, so the policy's own list is the reference. Surgeon's fees, ICU charges and diagnostic tests are core treatment costs, not consumables.
Rules at a glance
Two clocks on one admission
Illustration: Kavita is admitted to a network hospital for a planned operation. The hospital sends the pre-authorisation request at 9:00 am, so the insurer's decision is due by 10:00 am.
On the day of discharge the hospital sends the discharge request at 11:00 am, so final authorisation is due by 2:00 pm. Suppose it arrives at 5:00 pm and the hospital adds a charge for the extra hours. That additional charge is for the insurer to bear, not Kavita.
Splitting a cashless bill (illustrative figures)
- Assumptions, for arithmetic only: final hospital bill ₹2,40,000; items the policy lists as non-payable ₹6,000; the policy carries a 10% co-payment applied to the admissible amount; no deductible or sub-limit applies; the sum insured of ₹5,00,000 is unused.
- Admissible amount = ₹2,40,000 − ₹6,000 = ₹2,34,000.
- Co-payment = 10% of ₹2,34,000 = ₹23,400.
- Insurer pays the hospital ₹2,34,000 − ₹23,400 = ₹2,10,600.
- Patient pays ₹6,000 + ₹23,400 = ₹29,400.
- Check: ₹2,10,600 + ₹29,400 = ₹2,40,000, the full bill.
Result. On these assumed terms the insurer settles ₹2,10,600 with the hospital and the patient pays ₹29,400. A policy with a different non-payable list or no co-payment gives a different split.
Key points
- In a cashless claim the insurer, directly or through its TPA, settles the admissible bill with the hospital.
- The insurer must decide a cashless request within one hour, for emergency and planned admissions alike.
- Final discharge authorisation is due within three hours of the discharge request, and the insurer bears extra hospital charges caused by later delay.
- Non-payable items and any co-payment or deductible set by the policy are paid by the patient.
Common misunderstandings
- Cashless does not mean the whole bill is paid: non-payable items and any co-payment or deductible in the policy remain with the patient.
- The one-hour limit is not only for emergencies: it applies to planned admissions as well.
- A declined cashless request is not the end of the claim: a reimbursement claim can still be submitted.
Questions people ask
Who decides a cashless request, the hospital or the insurer?
The insurer, directly or through its TPA. The hospital sends the request, the TPA processes it on the insurer's behalf, and the insurer remains responsible for the decision.
Are gloves and masks paid for?
Only where the policy or an add-on covers consumables. Otherwise insurers commonly treat them as non-payable, and the patient pays for them.
What happens if treatment costs more than the amount first authorised?
The hospital sends an enhancement request with the medical reasons, and the insurer or its TPA assesses it against the policy terms.
What this lesson relies on
- IRDAI Master Circular on Health Insurance Business (29 May 2024) — cashless authorisation, discharge authorisation and collection of documents
This lesson was reviewed independently against these sources on 8 October 2026. Rules change: check the current regulation, scheme document or policy wording before relying on any figure. This is education, not advice.