To fight against the uncertainties of life, we buy a health insurance plan so that it can protect and secure us financially in the face of medical emergencies. Whereas the most important thing about health insurance is the coverage, the next pivotal part of it is the claims because only if we file the claims, then we get compensated for the expenses incurred due to the hospitalization. Now, the insurance companies offer two types of claim procedures, namely cashless and reimbursement. Both may sound the same but are a lot different. To clear out your doubts, today we are going to talk about every detail of cashless and reimbursement hospitalization in health insurance.
What Is Cashless Hospitalization And Its Benefits?
Previously, the only claim process available was the reimbursement one, where after the discharge from the hospital, you get compensated only if you have provided the insurer with the relevant documents and proofs. But, to make it more customer-friendly, cashless hospitalization is introduced where you do not have to pay out of your own pocket at the time of hospitalization.
In the case of cashless hospitalization, unlike the reimbursement claim, you are eligible to avail of the medical treatments without paying without making a payment. But to avail of this facility, you need to get admitted to one of the network hospitals or health care centers of your insurer. Network hospitals are the partner medical institutions of the company which offers the cashless facility to the insured people on the basis of the limit of the health plans. This procedure is much simpler and smoother than the reimbursement process.
The followings are the benefits of cashless hospitalization:
- You do not have to pay the hospital for your medical expenses apart from the nominal amount. Your insurance company is going to take care of the costs of your medical treatments.
- You do not have to face the hassles of the claim process. The insurer will directly pay the hospital. And the hospital or the TPA will communicate to the insurer and you as well.
- Usually, the TPAs are assigned by the health insurance companies to handle the claim related issue. Some insurers do not indulge any third party, rather they prefer to settle the claims directly.
- This process is time-saving, and also easier.
- For the cashless hospitalization, fewer documents are needed to be submitted.
- As you have a list of network hospitals within your vicinity ready in your hand, at the time of a medical emergency, you do not have to search for a preferable hospital.
What Is Reimbursement Hospitalization & Why Is It Beneficial?
Unlike the cashless hospitalization, for reimbursement procedure, the insured person, in the event of a hospitalization, has to pay for the entire medical and hospitalization bills at the time of the discharge, and then he/she can apply for the repayment as per the bills and receipts. In this case, you do not have to get admitted to the network hospital of the company. You can choose any hospital or valid health care center of your choice.
For this process, you need to submit a series of valid documents and proofs to the company or the claim team of the company. the important documents are – duly signed and filled claim form, discharge summary, invoices, and bills, treating doctor’s prescriptions, medical examination reports, medicine, and surgical bills, hospital expense bills, and any other documents as requested by the insurer.
The benefits of the reimbursement hospitalization are mentioned below:
- In this case, you have the freedom to choose the hospital according to your preference as getting admitted to a network hospital of the company is not mandatory.
- You do not have to worry about if the network hospital is within your area or not.
- You can directly handle your claim.
- It is an old and traditional process.
Difference Between Cashless & Reimbursement Hospitalization
To have a comprehensive idea about the two types of hospitalization/claim process, have a look at the following table.
|Parameters||Cashless hospitalization||Reimbursement hospitalization|
|Network hospital||It is mandatory to avail of the medical facilities in one of the network hospitals of the company.||You can choose freely your hospital as per your requirements.|
|Payment||The claim amount is directly settled to the hospital by the insurer.||The claim amount is settled to the insured person by the company.|
|TPA||Most of the health insurance companies involve TPAs in this type of claim.||No third party involvement is here.|
|Expenses of the medical treatments||Without paying anything, you can start your treatments. In the end, you may have to pay the nominal amount.||You need to pay out of your own pocket for your treatment, and after the discharge, you can apply for repayment.|
|Claim settlement||It is settled immediately after the discharge.||After the discharge from the hospital, you need to submit all the needed documents and then, the process will progress further.|
|Time||It takes less time.||It is time-consuming.|
|Scope of reassessment of the claim||If your claim gets rejected, you have the chance to file for a reimbursement claim.||Once your claim is rejected, you cannot file another claim on the same event.|
|Documentations||Here, fewer documents are required.||You need to preserve all the related documents for future reference.|
|Seamlessness||It is simpler because the patient or the family of the patient does not have to handle the claim. The insurance company of the TPA does that.||This type of claim is totally handled by the insured person of his/her family. So, it becomes a little hectic to manage everything properly.|
Are Cashless Claims Better Than Reimbursement Claims?
Both cashless and reimbursement hospitalizations/claims have come up with their pros and cons. But, as in the case of cashless claims, the insured person can start his/her treatments immediately without worrying about the bill payment, customers prefer the cashless facility more. Once you opt for this facility, you do not have to worry about the entire claim process as your insurer is there to handle that. On the other hand, for the reimbursement claim procedure, you, at first, need to pay the entire bill, only then you can apply for the repayment.
So, sometimes, the reimbursement procedure becomes a bit hectic for the customers. And also, I may create a financial burden, initially, as well. However, reimbursement hospitalization is the traditional and older approach, whereas cashless hospitalization is newer and gaining more popularity day by day because of its customer-friendly nature. Almost all the health insurers have kept their doors open for both cashless and reimbursement hospitalization/claims.
Looking at the above discussion, in the end, it can be said that though cashless hospitalization is more popular and convenient for most customers, after all, it totally depends on you and your satisfaction with which one you will prefer.