New IRDAI Rule: Health Insurers Must Approve Cashless Claims Within 3 Hours

The IRDAI's new regulations streamline health insurance processes, mandating three-hour cashless claim approvals, immediate emergency authorizations, expanded policyholder options, and incentives for no claims, enhancing overall policyholder experience.

IRDAI Introduces New Health Insurance Regulations

The Insurance Regulatory and Development Authority of India (IRDAI) has implemented significant updates to health insurance regulations, aiming to streamline processes and enhance policyholder benefits.

These changes are encapsulated in a comprehensive Master Circular on Health Insurance Products, which consolidates and repeals 55 previous circulars.

Three-Hour Time Limit for Cashless Claims

Key Updates:

1. Final Authorization Requirement:

• Insurers must provide final authorization for cashless claims within three hours of receiving a discharge request from the hospital.

2. Master Circular Date:

• The update is part of a Master Circular issued on May 29, 2024.

3. Policyholder Protection:

• Emphasis is placed on ensuring policyholders do not face delays in hospital discharge due to pending insurance approvals.

4. Insurer Responsibility:

• If the authorization delay exceeds three hours, the insurer must cover any additional charges incurred by the hospital from their shareholders' fund.

Immediate Authorization for Emergency Cases

In emergency situations, the IRDAI mandates that insurers must decide on cashless authorization requests immediately. To ensure compliance, insurers are required to establish the necessary procedures by July 31, 2024.

Additionally, insurers are encouraged to set up dedicated help desks at hospitals to handle these requests efficiently. The use of digital pre-authorization methods is also recommended to expedite the process.

Expanded Choices and Flexibility for Policyholders

The IRDAI has also introduced measures to provide policyholders with a broader range of choices. Insurers are now required to offer various products, add-ons, and riders that cater to diverse needs, covering different ages, regions, occupations, medical conditions, treatments, and types of healthcare providers.

This ensures that policyholders can select options that best meet their specific requirements.

Flexibility in Multiple Policy Claims

Policyholders with multiple health insurance policies can now choose which policy to claim the admissible amount from. This change aims to provide greater flexibility and convenience.

Additionally, insurers must include a Customer Information Sheet (CIS) with every policy document to enhance transparency and help policyholders make informed decisions.

No Claim Bonus and Policy Cancellation

The IRDAI's new regulations also introduce incentives for policyholders who do not make any claims during the policy period. These policyholders may be rewarded with a No Claim Bonus, which can be chosen as either an increase in the sum insured or a discount on the premium amount for the next policy period.

Furthermore, policyholders who decide to cancel their policy during the term are entitled to a refund of the premium or a proportionate amount for the remaining policy period.

Addressing Previous Claim Processing Issues

A survey by Local Circles highlighted that 43 percent of insurance policyholders experienced difficulties in processing their health insurance claims over the past three years.

Many policyholders reported that it took 10-12 hours to get discharged after being ready, due to delays in claim processing. In cases where patients had to stay an extra night at the hospital, the additional cost was often borne by them.

This was despite having pre-approval from the insurer’s TPA desk before admission.

Conclusion

The IRDAI's new regulations represent a significant step forward in improving the health insurance landscape in India. By enforcing quicker claim processing times, offering more choices, and introducing customer-friendly policies, the IRDAI aims to enhance the overall experience for policyholders and address longstanding issues in the system.