The Insurance Regulatory and Development Authority of India (IRDAI) has introduced significant changes to health insurance rules. They have issued a comprehensive Master Circular that consolidates all policyholder entitlements and replaced 55 previous circulars.
One major update aims to provide a faster and smoother claims process and improve service standards in the health insurance sector. According to the new rules, insurers must approve final authorizations within three hours of receiving the hospital’s discharge request.
“No policyholder should be kept waiting for hospital discharge,” stated IRDAI in the circular dated May 29, 2024. The circular also specifies that if there is a delay beyond three hours, any additional charges from the hospital will be covered by the insurer from their shareholder’s fund.
What Are The Key Changes Announced By IRDAI?
Here is the list of the key changes announced by IRDAI.
- Cashless Claim Approval
One key change is that insurers must approve cashless claims within 3 hours of receiving a hospital discharge request.
- Coverage of Additional Charges
If approval takes longer than 3 hours, the insurer will cover any extra charges incurred by the hospital.
- Policyholders’ Death During Treatment
Another key change made by IRDAI is that insurers must now release the policyholder’s mortal remains immediately if the policyholder passes away during treatment.
- Emergency Cases
Insurers must decide on cashless authorization requests within one hour in emergency cases.
- Pre-Authorization Process
Insurers are encouraged to provide a digital pre-authorization process, ensuring the initial amount is approved and acknowledging that the claim will be paid based on the final hospital invoice.
- Discount on Premium
Another significant change announced by IRDAI is that policyholders can get a premium discount if no claims were made in the previous year. At renewal, they can choose between increasing the sum insured or receiving the discount.
- No Claim Bonus
Lastly, insurers should reward policyholders with a “No Claims Bonus” by either increasing the sum insured or offering a premium discount if no claims were made.
Impact on Policyholders & Health Insurance Providers
IRDAI’s new update has a significant impact on insurance providers (Insurers) and policyholders. Let’s take a quick look at them.
For Insurance Providers:
- Aim for 100% Cashless Claims: Insurers should aim to settle all claims as cashless, using reimbursement only in rare cases.
- Quick Cashless Authorization: Insurers must decide on cashless authorization requests within one hour of receiving them.
- Help Desks at Hospitals: Insurers should set up help desks at hospitals to assist with cashless claims.
- Digital Pre-Authorization: Insurers should offer pre-authorization through digital means.
- Penalty for Delays: If ombudsman awards are not implemented within 30 days, the insurer must pay the policyholder Rs 5,000 per day.
For Policyholders:
With these new regulations, policyholders can expect:
- Faster Claim Processing: Quicker and more efficient service, especially with faster cashless claim authorizations.
- More Choices: A broader selection of insurance products for better-tailored coverage.
- Improved Customer Service: Higher standards of customer care, building greater trust between insurers and policyholders.
What is the Final Authorization for Discharge from the Hospital?
Here is the list of the aspects to look for discharge from the hospital regarding new rules;
- Three-Hour Approval: The insurer must grant final authorization within three hours of receiving the hospital’s discharge request. The policyholder should not have to wait to be discharged.
- Coverage for Delays: If approval takes longer than three hours, the insurer will cover any additional charges incurred by the hospital from the shareholder’s fund.
In Case of Death:
- It is the duty of the insurer to process the claim settlement request without any delay.
- The insurer must ensure the prompt release of the policyholder’s mortal remains from the hospital.
Final Thoughts
The IRDAI’s master circular marks a significant step forward in the health insurance sector, focusing on policyholders’ needs and well-being. By ensuring quicker claim approvals and discharge processes and holding insurers accountable for delays, this initiative aims to make healthcare more accessible and less stressful for millions of policyholders.
