List of disputes that could cause rejection in Insurance Claims

Since the second pandemic wave broke out in India, many people have rushed towards opting for a comprehensive health plan. The fear of being struck by any health condition has made people panic for themselves and their loved ones. Amidst a massive crisis for healthcare facilities during the past few months, people have lost their loved ones and hard-earned savings because they did not have health insurance to secure them.

However, many policyholders had trouble dealing with their insurers when they asked for a certain amount of medical expense claims. What they received was even less than their sum insured. Meanwhile, a close family member lies sick and helpless in a hospital bed; the claim process formalities and paperwork could become another reason to feel overwhelmed.

However, there might be discrepancies when the Insurer does not approve of the actual claim amount asking the policyholder to pay it from their own pockets. Getting approval for the asked amount of claim becomes a considerable crisis, especially when one does not know what would be paid by the company and what will not be.

In this article, Secure Cover’s team of Insurance experts will discuss in detail those discrepancies and policy guidelines that favor insurers more than policyholders when it comes to settling a claim amount. Being aware of these situations can help you choose wisely to procure your treatment.

Disputes that lead to rejection of Claims

The trouble while asking for a claim and the hope to get its approval lies somewhere in-between the more favorable conditions towards the insurance company. People have suffered much rejection for their insurance claims during their COVID treatment. The question they asked themselves and their insurance company is, “What exactly went wrong”?

They spent a large bill out of their pockets because they were unaware of a few protocols and situations. Some unknown situations lead a policyholder towards spending a large chunk out of their savings in hospital bills even though they had their health insurance.

• Hospitalizations that are medically not essential

Now, this condition is the most clearly stated guideline in itself. While obtaining a health policy, it is evident that hospitalization expenses would only be covered for the treatments considered medically essential or advised by a medical professional. The Insurer would consider covering up the hospitalization expenses of the policyholder or their family member if;

1. The hospitalization is advised for an intense level of care
2. A professional medical examiner prescribes specific treatment that could only take place in the hospital under professional supervision.
3. The treatment is by law conformed to the standard medical practice.

All these conditions make the hospitalization of a policyholder or their dear ones appropriate. There have been cases of people occupying beds soon after they get tested COVID positive for quarantine purposes. These kinds of hospitalization are not medically essential unless it is a severe case of COVID and must be medically supervised by a professional at all times.

Suppose one expects to receive a claim for the expenses incurred in mere diagnostic tests and observation for which no medically necessary hospitalization was recommended. In that case, the insurance company can reject the claim. It would make them your out-of-pocket expense.

• A clause called ‘reasonable and customary for the Insurer

As healthcare facilities are turning innovative with time, it is undeniable that the prices are leveling up. If it is a problem for the customers, the same goes for the insurance companies too. Any medical treatment today requires heaps of money, and the Insurer also wants to be prepared for it. Hence, the reasonable and customary clauses safeguarding the interests of the Insurer.

After the Insurer receives the request for a claim from a customer, they look out for the other hospitals in the area regarding the prices they are charging for the same kind of treatment. Under the reasonable and customary clause, the insurance company can ask to do so. By comparing the costs charged by hospitals of similar grade in the area, they rule out all the extra expenses that would become an out-of-pocket expense for the insured.

Before approving a claim, a policyholder should remember that the insurance company would constantly scrutinize the entire medical expense to rule out any excess cost. Hence, even though they have health insurance, one should never forget that they should evaluate all the expenses as if they are paying from their pocket.

• Limit on Room Rent

Most of the insurance policy comes with a set cap on the hospital room rent. It means a specified amount mentioned in the policy guidelines would allow you to choose a room lesser or equal to that cost. Going beyond that specified amount will always lead to a rejection from the insurance company in receiving approval for the claim amount.

Generally, the limit put up on the room rent is 1-2 percent of the total sum insured amount. Customers are often shocked and surprised where they asked for the approval of a room rent worth Rs. 10,000, but they received only half the amount based on the policy’s rules and calculation. It would mean that the customer would bear the remaining expense.

This situation could be easily avoided once a person knows the full room they can rent in a hospital. Else, they can always add higher room rent in their policy, but then the premium rate would differ based on the same. If the premium is low due to low room rent, be ready to spend money from your savings.

• Negligence and Errors in the form

There is a reason insurance companies ask the customers to fill out the forms at the beginning of the process to obtain a policy. The forms are meant to evaluate all the information about an individual along with their medical history. The form gives an insight into the future happenings and needs for medical assistance when the insurance company would intervene to pay the expense.

People are usually too lazy or negligible when it comes to paperwork and filling in all the details to the Insurer. Whatever medical declarations one provides, the company approves and helps in obtaining the policy based on that. So be ready for any discrepancies and claim rejection when the need arises because of the ill-informed details or any facts missed by the insured.

The insurance company does have the right to cancel the policy considering the customer kept them dark about a particular fact. Hence, it becomes essential to provide detailed and accurate medical history with relevant information to the Insurer.

Let’s Wrap Up!

These reasons for dispute could be avoided if the customer knows their policy guidelines well. Always knowing that the approval process could be as hectic as possible, carefully outlining the possibilities of rejection and ruling out any expenses not part of the sum insured coverage would be best.

Moreover, it is necessary to inform the Insurer about the medical history and other information related to health. When the need arises, the Insurer could help you bear your cost.

{To know more about health insurance and the policy best for you, visit www.securecover.in or give us a call at 9315720732}

Disclaimer: The content of this blog is based on the personal research of the writer. Reader’s discretion is advised. Neither Secure Cover nor the writer will be held responsible for any wrongful interpretation of the content of this blog.