Most Common Reasons for Health Insurance Claim Rejection

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Most Common Reasons for Health Insurance Claim Rejection

Registrationwala

The main reason why we get health insurance is to protect ourselves during medical emergencies, like critical illnesses and injuries. Having a health insurance policy helps us feel secure, knowing we can file a claim if something unexpected happens. But sometimes, health insurance claims don’t get approved. Insurance companies may reject the claims if they feel that the claims aren’t genuine. In this blog post, we’ll talk about the most common reasons why health insurance claims get rejected and what to do if an insurance claim gets rejected.

Reasons for Insurance Claim Rejection by Health Insurers

An insurance claim can be rejected for several reasons. Not all claims are valid, and health insurance companies are very careful about approving them. They won’t just hand out their money to anyone who files a claim. Only the claims they find “convincing enough” will get approved. Let’s take a look at the top reasons why health insurance claims get rejected.

Reason #1: Non-Disclosure of Pre-Existing Medical Conditions

When you purchase a health insurance policy, you are required to disclose any pre-existing medical conditions that you have. If you fail to do this, it can result in serious consequences, like claim denial. As a part of the risk assessment process for each applicant, the health companies take into account the pre-existing conditions the applicant has. If the applicant does not reveal their condition, their health profile is misrepresented. This prevents the insurance company from assessing the involved risks in a precise manner. 

Majority of health insurance policies in India have a specific clause regarding the requirement for disclosure of pre-existing conditions during the application process. If the applicants fail to disclose them, it is considered a breach of contract. In such a case, the insurer has the right to reject claims or deny coverage for the undisclosed condition.

Hiding the pre-existing condition doesn’t just impact the policyholders. It harms the entire system. Imagine if most policyholders withhold such crucial information. As a result, insurers would increase premiums for everyone in order to account for the additional risks. To ensure fairness and stability in the health insurance sector, transparency is essential from both health insurance companies and the individuals they insure.

So, make sure you disclose all the pre-existing medical conditions that you have while filing an application for an insurance policy. You’ll save yourself from a lot of trouble.

Reason #2: Submission of Insufficient Documentation

If you want your health insurance claim to be approved in a seamless and timely manner, you must make sure that you submit all the essential documents. In case of any omissions or inadequacies in the documentation process, the health insurance claim can be delayed, complicated and sometimes also result in potential rejections.

Insurance companies rely heavily on documentation to authenticate the genuineness and particulars of your health insurance claim. With the help of documents like medical records, bills and doctor’s reports/prescriptions, relevant information about the treatment taken, diagnosis and overall medical necessity is conveyed to the insurer.

Because of thorough documentation, the insurer can accurately evaluate the coverage amount/claim amount that the insured is entitled to, taking into account their insurance plan, thereby guaranteeing them accurate reimbursement. 

It is imperative that you submit an intact claim file which contains all the necessary documents as it’ll allow the claim processing team to review and approve your claim efficiently and save you from delays and unnecessary communication.

Reason #3: Policy Lapse Due to Non-Payment of Premiums

When you purchase a health insurance policy, you must make it a rule to pay your premiums in a timely manner. Failure to pay premiums can result in policy lapse, which can lead to serious consequences such as rejection of claims filed during the period of policy lapse.

For those who are new to purchasing health insurance, a health plan is considered to have "lapsed" if the required premiums are not paid within the allotted grace period, which is typically 30 to 60 days after the due date. This signifies the end of your insurance policy and all related benefits.

You are practically without insurance coverage during the policy lapse period. As a result, your insurance plan will not pay for any medical bills, procedures, or claims that are filed during this period. You will be solely responsible for the full cost of any medical services you get during the policy lapse, and claims for those services will be automatically denied. 

So, if you want to avoid insurance claim rejection, don’t allow your policy to lapse in the first place.

Reason #4: Providing Incorrect Details During Policy Purchase

Another common reason for health claim rejection is providing incorrect details at the time of policy purchase or claim filing. Incorrect details of the patient, missing/incorrect documents like hospital discharge, medical bills, etc. can all lead to claim rejection. So, make sure you always double-check all the details and ensure they’re correct before submitting them to the insurer along with all the necessary paperwork.

If you think about it, it’s a pretty simple step but it can save you from a lot of hassle and of course, from getting your insurance claim rejected. 

Reason #5: Delay in Filing Health Insurance Claim

Even the most composed people can be overwhelmed when medical emergencies arise. During such emergencies, it becomes easy to overlook the claim procedures and health policies. However, if you want to file an insurance claim against your health insurance policy, it must be done within a specific timeframe, generally within 24 hours of hospitalization. If you fail to notify your insurer regarding the hospitalization within this timeframe, then they can deny your claim. 

To avoid facing such an issue, ensure you inform the insurer promptly. If you cannot inform them, then allow someone on your behalf to do so. This simple step can help you avoid claim rejection and also ensure timely access to medical assistance you require.

Reason #6: Claim is made during the Waiting Period

In the insurance world, waiting period refers to a pre-determined period during which certain benefits of your health insurance policy aren’t yet made available for you. You have to wait for the waiting period to end before you can avail them. If you file a request for claim during this time, the insurer will typically deny it with the exception of specific cases like emergency hospitalization (as per the terms and conditions of your policy.)

Factors like insurance company policy type and the medical conditions covered by the policy decide the length of the waiting period. For pre-existing conditions, the waiting period generally ranges from 2-4 years. Once this period ends, the claims related to these conditions are accepted as per the terms and conditions of the policy.

Certain policies, however, allow the policyholders to shorten the waiting period by paying additional premium. To avoid unnecessary claim denial, it is important to understand the policy’s waiting period.

What to do if an Insurance Claim is Rejected?

If your insurance claim gets rejected by the insurance company, then you can file for it again. Suppose your claim was rejected due to incorrect information or missing documents. In this case, you can correct the details or attach missing documents and resubmit the claim application. 

If you still do not receive satisfactory response from your insurer within a reasonable period of time or feel dissatisfied with their response, you can approach the Insurance Ombudsman or Grievance Redressal Cell of IRDAI.

Conclusion

When you file an application for an insurance claim, there isn’t a 100% guarantee that your insurance claim will get approved by the insurance company. Health claim rejection can happen due to a variety of reasons as discussed in this blog post. However, you can make sure your health insurance serves its purpose and provides you with security and comfort in the event of a medical emergency by avoiding common traps. 

All it takes is providing accurate information, timely policy renewals, and a thorough grasp of your policy to make sure the claims procedure is smooth. Do these simple things, and you’ll be able to save yourself from blowing all your money during a medical emergency.

If you want to provide health insurance as a corporate agent or insurance broker, connect with Registrationwala. We’ll help you to obtain an IRDAI insurance license from the Insurance Regulatory and Development Authority of India (IRDAI) in an effortless manner.

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