A health insurance claim is expected to reduce the burden of hospitalisation. The amount the insurer approves may be lower than the total hospital bill. This can leave policyholders wondering why the full amount wasn’t paid and what to do next. A health insurance claim that is partially settled does not automatically mean that the insurer has rejected the claim.
In some cases, a health insurance claim means that only a part of the claimed expenses is approved. This happens based on the policy terms. Deductibles, co-payments, sub-limits, exclusions, non-payable expenses, and missing or incomplete documents can all impact the settlement amount. Because of this, it is important to understand how the settlement is calculated before agreeing to the amount.
This guide explains the reasons behind the settlement, the steps to verify it, and the options available to policyholders.
What Does a Partially Settled Health Insurance Claim Mean?
Partial settlement occurs when an insurance provider agrees to pay a portion of a health insurance claim. For instance, the hospital bill is ₹2 lakh, but the insurance company accepts ₹1.65 lakh. The remaining ₹35000 could be part of the out-of-pocket costs that the policy does not cover or the cost-sharing provisions that apply to the insured.
Liberal or withholding the approved amount does not necessarily mean there is a mistake with the hospital bill. There are specific terms, conditions, limits, and exclusions to health insurance policies.
Normally, the settlement or claim calculation statement will assist the policyholder in comprehending which costs were thought to be payable and which costs have been deducted from the total settlement. If the explanation isn’t clear, the policyholder may request a detailed explanation from the insurance company.
Why Is a Health Insurance Claim Partially Settled?
There can be multiple reasons behind the partial settlement of health insurance claims. It can be determined by the policy wording, claim, and treatment documents.
Deductible or Co-Payment
Depending on the structure of the policy, the coverage would be subject to a deductible. In some policies, there is a deductible amount that the policyholder must cover before the insurer can be held responsible for the allowed claim. Co-Payment: The policyholder’s responsibility is a fixed percentage for an admissible claim. This can mean that these provisions will lower the amount that the insurer will have to pay.
Policy Sub-Limits
Certain policies might have restrictions on specific treatments, room types, or medical costs. If the actual cost is above an applicable sub-limit, the insurance company might not be able to cover the cost.
Non-Payable Hospital Expenses
Items are listed on a hospital bill that are not covered by the policy. Some administrative, consumable, and/or personal use expenses may not be covered, depending on the terms of the policy.
Exclusions or Treatment Not Covered
All health insurance policies contain exclusions. If a treatment, condition, or cost is not covered by the policy, then the cost of that treatment, condition, or cost may be deducted from the claim.
Sum Insured Already Used or Insufficient
The amount of sum insured that is available can impact the amount of settlement. If part of the coverage has already been used during the policy period, the subsequent amount may not be enough to cover an eligible claim in full.
Expenses Not Supported by Required Documents
Failure to provide missing bills or any other necessary documents, such as prescriptions, investigation reports, discharge summary, etc., can impact the claim evaluation. The insurance company might ask for further details before deciding on a payable amount.
How to Check Why Your Claim Was Partially Settled
Before reaching the conclusion that the insurance company has miscalculated the claim, first review the claim settlement statement.
Follow an easy verification process:
- Compare the hospital bill and approved amount: You should check the total bill, what you have claimed from the hospital, and what was approved by the insurance company.
- Read the settlement statement: Check for deductions and the explanation listed for each deduction.
- Check your policy wording: Make sure you understand the policy wording regarding deductibles, co-payment, sub-limits, exclusions, etc.
- Review your claim documents: Ensure that all bills, reports, prescriptions, and discharge paperwork were filled out properly.
- Check the remaining sum insured: Ensure that there were no premiums paid out during the policy period.
- Ask for clarification: If the deduction is not clear, call the insurance company and ask for a written explanation of the deduction.
This process can be used to assess if the problem is the result of a policy provision, documentation issue, or other claim assessment factor.
What to Do If Your Health Insurance Claim Is Partially Settled
Don’t overlook the difference. If you think the settlement amount is not what the policy says, then the first step is to ask the insurance provider for a comprehensive claim computation file.
Describe the deduction you would like reviewed and include any supporting documents as required. Any additional information the insurer requests must be sent within the time frame, and copies must be kept of all information sent.
You also have the option to ask for reconsideration of the claim when you think that an eligible expense was wrongly disallowed or a deduction wasn’t clearly explained in the claim. Be concise and cite the specific policy clause, bill, or medical document.
If the insurer does not change its decision, then review the internal procedure for handling complaints by the insurer. Policyholders are advised to raise their grievances with the Grievance Redressal Officer of the insurer in writing with relevant documents first, according to IRDAI. The insurance company must have the complaint addressed within the allotted timeframe.
Can You Raise a Complaint Against a Partial Health Insurance Settlement?
Absolutely, a policyholder has the ability to raise a grievance against the insurance company when they feel the company does not have their back with regard to handling or explaining a claim. A health insurance claim partial settlement can be questioned when the policyholder feels their claim was settled partially but incorrectly, according to the policy terms.
The first course of action is normally to write to the Grievance Redress Officer of the insurer. Attach the claim number, details of the policy, the settlement statement, the bills, and a clear explanation of the issue. IRDAI’s Bima Bharosa FAQ recommends that policyholders file complaints with supporting documents and get an acknowledgment in writing.
In case the policyholder does not get a satisfactory reply from the insurer or the complaint is not resolved within the specified time limit, the policyholder can also go to IRDAI via Bima Bharosa. The portal will be used for registering and tracking complaints, and claim-related complaints will need the claim number.
It is also possible that the Insurance Ombudsman could be able to help in the event of a dispute that is eligible under the insurance rules and jurisdiction.
How to Reduce the Risk of a Short Health Insurance Claim Settlement
Having knowledge of a policy before a person becomes hospitalised may minimise any unexpected policy deductions. A health insurance claim less than bill situation can occur when the hospital bill doesn’t overlap with the insurance coverage, rather than when the entire health care is uncovered.
Be careful to review policy coverage conditions before selecting or using a policy. Check the room rent limit, co-payment and deductibles, disease or treatment sub-limit, exclusions, and sum insured.
Keep medical bills, prescriptions, diagnostic reports, and discharge documents organised when making a claim. If required, ensure that the insurance desk and/or TPA in the hospital are aware of the documentation requirements.
It’s also important to realize whether cashless treatment is applicable or if reimbursement is applicable, and if there are any pre-authorisation requirements. Preventing unnecessary documentation problems can be facilitated through clear communication with the insurer, hospital, and TPA.
Questions to Ask Before Accepting a Partial Settlement
Policyholders may ask before final settlement without clarification:
- What items did I claim for?
- Which policy clause would pertain to each deduction?
- Has any Co-payment or deductible been applied?
- Was any sub-limit applied to the amount approved?
- Did you have to pay any additional fees due to missing paperwork?
- What amount of my sum insured is outstanding?
- If I’m willing to provide more documents, can the claim be reviewed?
- If I disagree with the insurance company’s calculation, what is the insurance company’s grievance process?
Written responses can be useful as they will give an accurate record of the insurer’s explanation, and may be helpful if the issue is raised again in the future.
Conclusion
A lower claim payout can be confusing, especially when the hospital bill is much higher than the amount approved. A health insurance claim that is partially settled can happen for many policy-based reasons, such as deductibles, co-payments, sub-limits, exclusions, non-payable expenses, or gaps in documentation.
The best strategy is to look at the settlement statement, compare it to the policy wording, and ask the insurer for an explanation of each deduction. If the problem still does not get solved, policyholders can use the insurer’s grievance mechanism and, where relevant, raise the issue with Bima Bharosa or other available redressal channels.
Customers seeking guidance on insurance-related financial decisions can look to Aspire Wealth for more information and support.
