Reimbursement Claim Process — Documentation Checklist

When a claim is made by reimbursement

In a reimbursement claim the policyholder pays the hospital and then claims the money back from the insurer. The cover is the same as in a cashless claim; only the order of payment differs.

Reimbursement arises in three situations: treatment is taken at a hospital outside the insurer's network, cashless is unavailable or has been declined, or the policyholder chooses to pay first.

The documents

The policyholder submits the claim form with the original hospital bills, the original discharge summary, investigation reports, doctor's prescriptions and pharmacy bills. Together these show what the illness was, what treatment was given and what it cost.

Missing documents are a common cause of delay, because the insurer cannot assess a claim it cannot verify. An employer verification letter is not a standard requirement for a health reimbursement claim.

In a cashless claim, by contrast, the insurer or its TPA collects the required documents from the hospital, under IRDAI's Master Circular on Health Insurance Business (29 May 2024).

Two time limits

The first limit is the policyholder's: the claim has to be submitted within the period stated in the policy. That period is a policy term, not a single figure fixed for all policies.

The second is the insurer's. Under IRDAI's Master Circular on Protection of Policyholders' Interests (5 September 2024) a reimbursement claim must be settled within 15 days of its submission. The limit was 30 days under the older rules, which is why older material still quotes that figure. If the insurer delays, it pays interest at the bank rate plus 2%.

How the amount is assessed

The insurer checks the bills against the policy terms: the sum insured, any sub-limits, co-payment, deductible and exclusions. What is admissible under those terms is paid; the rest stays with the policyholder.

Policies also refer to reasonable and customary charges. These are charges consistent with the prevailing rates for similar treatment, services and supplies in the same geographical area. The benchmark is what comparable providers in that area charge, not the cheapest rate available anywhere.

A late or disputed claim

A claim submitted after the policy's time limit may be questioned by the insurer, but that does not end the matter. The policyholder can explain the reasons for the delay, and a refusal can be challenged.

The complaint goes to the insurer first. If the insurer rejects it, or does not answer within a month, the policyholder may approach the Insurance Ombudsman, who looks at the reasons for the delay.

Rules at a glance

Key points

• In a reimbursement claim the policyholder pays the hospital first and then claims from the insurer.
• The claim form goes in with original bills, the discharge summary, investigation reports, prescriptions and pharmacy bills.
• The insurer must settle a reimbursement claim within 15 days of submission (older material says 30), with interest at the bank rate plus 2% for delay.
• Reasonable and customary charges are measured against prevailing rates in the same area, not the lowest rate.
• A late claim can be questioned, but a refusal can be taken to the insurer and then the Insurance Ombudsman.

Common misunderstandings

• The 30-day settlement period is not the current rule: since the Master Circular of 5 September 2024 the limit is 15 days from submission.
• A late submission is not an automatic end to the claim: the reasons for delay can be explained and a refusal challenged.
• Reasonable and customary does not mean the cheapest rate: the comparison is with prevailing charges for similar treatment in the same area.

Questions people ask