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On May 29, 2024, the Insurance Regulatory and Development Authority of India (IRDAI) released a master circular on health insurance that aims to empower policyholders and enhance the health insurance sector. This new circular repeals 55 previous circulars and consolidates information on policyholder entitlements for easier reference. It emphasizes the importance of a smoother, faster, and hassle-free claims experience, ensuring improved service standards across the industry. Let’s delve into the key highlights of this circular.
Approval for Cashless Facility
One of the most significant aspects of this circular is the push for cashless claim settlement. Insurers are now required to decide on cashless authorization within one hour of receiving the request. This initiative aims to make the claim process more efficient and reduce the instances where policyholders have to pay out-of-pocket and seek reimbursement later.
The IRDAI has mandated that insurers strive to achieve 100% cashless claim settlements. Instances of claims being settled through reimbursement should be minimal and only in exceptional circumstances. Insurers have until July 31, 2024, to establish the necessary systems and infrastructure to support this change.
Final Authorization for Discharge
To further streamline the claims process, the IRDAI has stipulated that health insurance companies must provide final authorization for cashless claims within three hours of receiving a discharge request from the hospital. This measure ensures that policyholders are not kept waiting to be discharged from the hospital. If there is any delay beyond the three-hour deadline, the insurer will be responsible for covering any additional charges levied by the hospital.
The circular explicitly states that under no circumstances should the policyholder be made to wait for discharge. Any additional amount charged by the hospital due to delays beyond the stipulated three hours will be borne by the insurer from the shareholder’s fund.
In the unfortunate event of the policyholder’s death during treatment, the insurer is required to immediately process the claim settlement request and facilitate the release of the mortal remains from the hospital.
Pre-Authorization
To make the claims process even more seamless, insurers are encouraged to provide a pre-authorization process through digital modes. This involves sanctioning an initial amount along with an acknowledgment that the claim will be paid, subject to the final invoice received from the hospital.
No Claim Bonus
The IRDAI’s new circular also introduces benefits for policyholders who do not make any claims during a policy year. Policyholders will be eligible for a ‘No Claim Bonus’ (NCB), which can be availed in two forms: either by increasing the sum insured or by offering a discount on the premium amount at the time of renewal. This new norm is effective immediately and aims to make health insurance more affordable, especially in the wake of rising premiums since the COVID-19 pandemic.
At present, the common practice for providing a no claim bonus (NCB) in health insurance is by offering policyholders a cumulative bonus, which is an addition to the sum insured. However, the new circular will offer flexibility to the policyholders and give them greater control over their health insurance plans (i.e., either increase the sum insured or avail discount on premium).
Wider Choice of Products
The circular mandates that insurers offer a variety of products, add-ons, and riders to cater to different demographics, including different ages, regions, occupations, medical conditions, treatments, and types of hospitals and healthcare providers. This includes ensuring equal treatment options across all lines of medicine, including Allopathy and AYUSH (Ayurveda, Yoga and Naturopathy, Unani, Siddha, and Homeopathy).
Claim Settlement Process
To ensure fairness in claim settlements, no claim shall be repudiated without the approval of the Product Management Committee (PMC) or a three-member sub-group of the PMC called the Claims Review Committee (CRC).
Multiple Policies
The circular also addresses policyholders with multiple health insurance policies. It allows them to choose the policy under which they can get the admissible claim amount. The primary insurer with whom the claim is first submitted should then coordinate and facilitate the settlement of the balance amount from the other insurers.
Dedicated Help Desks
To support the cashless claim process, insurers may arrange for dedicated help desks at hospitals to manage cashless requests efficiently. This will help in providing immediate assistance to policyholders and ensuring a smooth claims process.
Conclusion
The IRDAI’s master circular on health insurance is a significant step towards making health insurance more policyholder-friendly. By pushing for 100% cashless claim settlements, streamlining the discharge process, and introducing benefits like the No Claim Bonus, the IRDAI aims to provide policyholders with a more efficient and hassle-free experience. The circular also ensures that policyholders have a wider choice of products and fair claim settlement processes. These measures are expected to strengthen the health insurance sector and provide better service to policyholders across India.
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