Common reasons for claim rejections and how to avoid them

A Check-List

Health insurance is an essential part of our lives, offering financial protection in times of medical need. However, the complexity of policy terms and conditions can often lead to claim rejections, leaving policyholders in a difficult situation. To enhance understanding and awareness, we have outlined the major reasons for claim rejections and how you can prevent them.

Non-disclosure of existing diseases: One of the leading causes of claim rejections is the failure to disclose pre-existing conditions. Insurers request this information at the policy's inception to assess risks and provide appropriate coverage. Failure to disclose such conditions can result in claim rejection and, in some cases, termination of the policy. 

Permanent exclusions & mandatory waiting periods: Every policy comes with a mandatory waiting period for specific diseases, ranging from 1 to 4 years. Some diseases, like Chronic Kidney Disease, Parkinson's, Alzheimer's, and HIV, are permanently excluded.

Non-submission of documents: Incomplete document submission, particularly in reimbursement claims, is a common reason for claim rejection. Original documents such as discharge summaries, hospital invoices, and patient records are essential for processing claims. Ensure all required documents are submitted promptly to avoid claim rejection.

Frauds: Fraudulent claims, both soft and hard, contribute significantly to claim rejections. Soft frauds involve minor exaggerations or non-disclosures, while hard frauds are intentional and premeditated. Insurers consider fraud a serious offense, leading to policy cancellation, blacklisting of hospitals, or removal from the list of empanelled hospitals.

Claim rejections can be confusing for an average customer and thus in all instances of claim rejection, insurers are mandated to provide a written explanation of the reasons for rejection. These rejections can often be prevented by following these simple principles:

Disclose All Pre-Existing Conditions: Make comprehensive health-related disclosures at the time of policy purchase to avoid future claim rejections.

Review Policy Terms & Conditions: Carefully review policy terms and conditions, paying attention to permanent exclusions and waiting periods. Check if the illness falls under any waiting period before hospitalization.

Utilise Cashless Facility: Opt for treatment at network hospitals for pre-negotiated costs and the convenience of a cashless process. Avoid seeking treatment at blacklisted or excluded hospitals, which insurers publish on their websites.

Contact Customer Support: Seek guidance from customer support, especially for planned hospital admissions. Insurers often provide assistance in choosing expert doctors and obtaining second opinions.

Be Cautious: Regularly review patient information for accuracy, especially during planned admissions. Double-check cashless approvals and be cautious during discharge to avoid agreeing to exaggerated claims.

By following these guidelines, policyholders can significantly reduce the chances of claim rejection and ensure a smoother experience with their health insurance coverage.

Navigating the intricacies of health insurance and avoiding claim rejections requires diligence. A well-informed and vigilant approach not only enhances the likelihood of successful claims but also ensures that health insurance serves its fundamental purpose of providing financial security during challenging times.

(The writer is Chief Claims Officer, Star Health & Allied Insurance Co Ltd)