Nuts and bolts of health insurance claims: Reimbursement vs. cashless procedure

Health insurance provides financial safety and access to medical care services when you need them the most. Understanding the two primary methods of health insurance claims is crucial: reimbursement and cashless procedures when it comes to receiving medical treatment. Reimbursement requires you to pay for treatment upfront and later claim reimbursement, while cashless procedures allow for direct settlement between the insurer and the network hospital. Let’s delve into the nuts and bolts of these two processes, shedding light on how they work and the key differences between them.

Reimbursement procedure

The reimbursement procedure is a common method used for health insurance claims. Here’s how it works:

• Paying out-of-pocket: You initially pay for the medical expenses out of your pocket at the time of treatment under the reimbursement process.
• Collecting required documentation: You need to collect all the necessary documents, including bills, invoices, medical reports, prescriptions, and any other supporting documents required after receiving the medical treatment.
• Submitting claim: You need to submit a claim once you have gathered the required documentation. This typically involves filling out a claim form and attaching the relevant documents.
• Review and processing: Verifying and reviewing the authenticity of the documents and ensuring that the treatment is covered under your policy. They may also evaluate whether the expenses are reasonable and customary.
• Reimbursement: the amount is reimbursed to the policyholder for the eligible expenses based on the terms of your policy if the claim is approved. The reimbursement is usually made through a direct bank transfer or a check.

Cashless procedure

The cashless procedure, also known as the network-based procedure, is another way to avail health insurance benefits. Here’s how it works:

• Network providers: Cashless procedures are available only at network hospitals or healthcare providers that have a tie-up. These providers have a pre-established relationship with the insurer, allowing for a smooth cashless transaction process.
• Pre-authorisation: You need to seek pre-authorisation from Kotak General Insurance before receiving medical treatment. This involves contacting your insurer or the third-party administrator (TPA) to inform them about your planned hospitalisation or treatment.
• Verification and approval: TPA evaluates your pre-authorisation request, checking if the treatment is covered under your policy and whether it meets the necessary criteria. If approved, they issue an authorisation letter mentioning the approved amount.
• Availing treatment: You can proceed with the medical treatment at the network hospital with the authorisation letter in hand. The hospital directly coordinates the billing and settlement.
• Settlement: The hospital sends the bill and medical documents for settlement after the treatment is completed. We pay the eligible expenses directly to the hospital and you are only responsible for any non-covered or deductible amounts.

Key differences between reimbursement and cashless procedure

• You pay for the treatment upfront and later claim reimbursement in the reimbursement procedure, while in the cashless procedure, Kotak General Insurance settles the bill directly with the network hospital.
• You need to collect and submit all the relevant documents after treatment for reimbursement, while cashless procedures require pre-authorisation and submission of documents before treatment.
• Reimbursement allows you to choose any hospital or healthcare provider, while cashless procedures are limited to the insurer’s network of hospitals.
• Reimbursement may require you to bear the initial expenses, while cashless procedures often require only the payment of non-covered or deductible amounts.
• Cashless procedures offer convenience by eliminating the need for upfront payment and subsequent reimbursement, while reimbursement allows flexibility in choosing healthcare providers.

Conclusion

Understanding the differences between reimbursement and cashless procedures is important for navigating health insurance claims effectively. Both methods have their advantages and considerations, such as flexibility in provider choice vs. convenience and ease of transaction.