Cashless & Reimbursement Claims
The two ways a health claim is paid — cashless at a network hospital and reimbursement after paying the bill — with the documents involved, the role of the TPA and the time limits IRDAI set in 2024.
Two routes, one policy
In a cashless claim, treatment is taken at a hospital in the insurer's network and the insurer settles the admissible bill with the hospital, directly or through a third-party administrator (TPA). The patient pays only non-payable items and any co-pay or deductible. In a reimbursement claim, the patient pays the hospital and then claims the money back. Both are assessed against the same policy terms.
A TPA is a company licensed by IRDAI that facilitates claim processing for insurers, including cashless settlement, health cards and document verification. Cashless treatment is normally available only at network hospitals; elsewhere the usual route is to pay and claim reimbursement.
How a cashless claim runs
For a planned admission, a pre-authorisation request goes to the insurer or its TPA before the patient is admitted, so that approval is in place. How far ahead it is sent is the insurer's own practice, and the time limits for telling the insurer about any hospitalisation are set by each policy.
The insurer must decide on a cashless request immediately, and in any case within one hour. At discharge, final authorisation must be given within three hours; if it takes longer, the insurer bears the extra hospital charges caused by the delay. For cashless claims the insurer or TPA, not the policyholder, collects the required documents from the hospital.
How a reimbursement claim runs
The policyholder submits the claim form with original bills and receipts, the discharge summary, investigation reports and prescriptions, together with KYC documents. What must be supplied, and by when, is set by the policy.
The insurer must settle a reimbursement claim within 15 days of its submission. Earlier the limit was 30 days from the last document, or 45 days where the claim was investigated. Interest at the bank rate plus 2% is payable for delay.
Refusals and day care
A refusal of cashless authorisation is not a rejection of the claim. The patient can go ahead with treatment, pay the hospital and file a reimbursement claim, which is then assessed under the policy terms.
A claim does not always need an overnight stay. Day-care procedures, such as cataract surgery, dialysis and chemotherapy, need less than 24 hours in hospital; a policy defines or lists those it covers. An out-patient (OPD) consultation is not day care.
Rules at a glance
A planned operation and a clock
Illustration: Imran, 52, is to have a planned knee operation at a network hospital in Lucknow. The hospital's insurance desk sends a pre-authorisation request before admission, and the insurer has one hour to decide on it.
On the day of discharge the hospital requests final authorisation, and the insurer has three hours to give it. Had the request been refused at the start, Imran could still have had the operation, paid the bill and filed a reimbursement claim.
What the patient pays in a cashless claim
- Assumptions, for arithmetic only: hospital bill ₹2,00,000, of which ₹8,000 is non-payable consumables; the policy has a 10% co-pay and no other limits.
- Admissible claim = ₹2,00,000 − ₹8,000 = ₹1,92,000.
- Co-pay = 10% × ₹1,92,000 = ₹19,200.
- Insurer pays the hospital ₹1,92,000 − ₹19,200 = ₹1,72,800.
- Patient pays ₹8,000 + ₹19,200 = ₹27,200.
Result. ₹1,72,800 is settled cashless and ₹27,200 is paid by the patient at discharge; the two add up to the bill of ₹2,00,000.
Key points
- Cashless means the insurer pays the network hospital direct; reimbursement means the patient pays first and claims afterwards.
- A cashless request must be decided within one hour and final discharge authorisation given within three hours.
- A reimbursement claim must be settled within 15 days of submission, with interest at bank rate plus 2% for delay.
- A cashless refusal leaves the reimbursement route open.
Common misunderstandings
- Cashless does not mean nothing to pay: non-payable items, co-pay and any deductible are still the patient's.
- A refusal of cashless is not a repudiation: the claim can still be made by reimbursement.
- Day care is not out-patient treatment: it is a procedure needing less than 24 hours in hospital.
Questions people ask
What if the hospital is not in the insurer's network?
The usual route is to pay the bill and file a reimbursement claim with the insurer.
Who gathers the papers for a cashless claim?
The insurer or its TPA collects the required documents from the hospital; that task is not placed on the policyholder.
How soon must the insurer be told about a hospitalisation?
The time limit is set by each policy, so the policy wording has to be read.
What this lesson relies on
- IRDAI Master Circular on Health Insurance Business (29 May 2024) — cashless authorisation, discharge and claim documents
- IRDAI Master Circular on Protection of Policyholders' Interests (5 September 2024) — claim settlement timelines and interest for delay
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.