Could your Covid-19 claim be rejected by the health insurance company? Know the reasons why, and how to avoid

The deadly second wave of the Covid-19 pandemic has spread rapidly in India and has claimed more lives, especially those of young adults and children. The rate of hospitalization is at 2 times more than what was witnessed during the first wave of the coronavirus contagion in 2020. Patients in desperate need of attention and treatment have surged in hospitals.  There has been widespread panic across the country on account of lack of Covid-19 vaccines, oxygen supply, life-saving equipment and hospital beds.

The Government of India has ramped up efforts to increase production of the vaccine as well as mass vaccination drives PAN-India. With vaccination being made available for all citizens above the age of 18 years since 1st May, there is an overall positive outlook that the viral outbreak can be contained to some extent soon.

Meanwhile, the situation is not so rosy as far as Covid-19-related medical claims and health insurance policies are concerned. Given the large rise in the number of claims being submitted as a result of the pandemic, policyholders across the country are scrambling to get their health insurance claims settled by insurance companies. It is reported that there were ~11 Lakh COVID-19 health claims for more than Rs. 15,000 Crores filed with insurance companies. Of these 1.7 Lakh plus claims await settlement, owing to delays as a result of disagreements on claim amount and hospital charges.

Besides, numerous claims are getting rejected by insurance companies on grounds of criticality of case, non-disclosure of pre-existing diseases (PED), insufficient or incorrect documentation or hospital charge disparities.

Here are the top reasons why Covid-19 claims are getting rejected, and how to avoid them:

1. Criticality of case / Hospitalization reasons: Hospitalization claims for coronavirus-related treatment will be accepted by an insurance company only if it meets the following 3 criteria:
   1. A certified doctor prescribed hospitalization to the patient,
   2. The treatment could only be conducted in a hospital, and
   3. The treatment was given by following standard operating procedures and guidelines stipulated for Covid-19
      
      Cases with mild to moderate symptoms may be prescribed only oral medicines with at-home care and quarantine. Such cases will not require treatment as in-patient hospitalization, unless otherwise advised by the medical practitioner who is monitoring the patient.  If the patient still insists on being admitted, costs for hospitalization will not be covered by the health insurance policy, and such claims would get rejected.
      
      It has been observed that nearly 90 percent of people suffering from Covid can recover at home with timely medication and observation of symptoms. This would ease the load on hospitals that are struggling to accommodate critical cases of acute coronavirus patients who require lifesaving hospital facilities to recover.
      
      Similarly, submitting expenses related to lab tests, OPD etc. when the patient has not been admitted in a hospital can lead to claim rejection by insurers, since it is not in line with the above-mentioned hospitalization guidelines.
      
      
2. Non-disclosure of PED: Policyholders need to declare any pre-existing diseases or specific illnesses at the time of purchasing a health insurance policy. In particular, comorbid conditions such as blood pressure and diabetes that increase the severity and risk of contracting COVID need to be declared in the policy.
   
   Failure to disclose such ailments could lead to rejection of any medical claim, including those related to Covid-19 treatment sought in a hospital.
   
   
3. Insufficient Documentation: In order to assess coronavirus-related claims and evaluate the severity of the condition (as to whether or not hospitalization was crucial), insurance companies require all the related documentation to be submitted along with the claim form. These would include lab reports, doctor’s prescriptions, hospital charge invoices and discharge reports.
   
   Insurers observe in many cases that policyholders submit only the diagnostic report confirming that the insured patient is Covid positive. Such claims that do not furnish all the necessary supporting documentation (confirming that the treatment for Covid-19 was approved to be sought in a hospital) might be rejected.
4. Disparity in Hospital Charges and Admission: There has been a steep rise in hospital bills and charges (as high as 15-20% ) due to the revised measures that had to be adopted by them to curb the spread of the virus. Moreover, the standard rate card, as formulated by the General Insurance Council, has not been adhered to by many hospitals. This has led to disputes between medical facilities and insurance companies over the acceptable and permissible costs. As a result, many claims are being delayed for settlement or getting settled for lower-than-claimed amounts.
   
   Additionally, some hospitals have been denying or delaying cashless admission. Many policyholders, in their desperation, opt for admission on payment out of fear of losing the hospital bed to the next needy patient, thinking that they can submit medical claims on reimbursement basis. In numerous such cases, insurers are rejecting claims stating that the approved protocol or process has not been followed, or that the amount is higher than the coverage allowed.
5. Domiciliary Hospitalization: Due to scarcity of beds in hospitals and medical centers, many patients are being prescribed at-home or domiciliary hospitalization, with all the hospital equipment and paraphernalia being maintained at home to monitor the patient’s vitals. Insurance companies will accept claims for domiciliary hospitalization only upon seeking prior consent, under doctor’s advice, and if the health insurance policy specifically covers it. While majority health insurance plans do cover domiciliary hospitalization, there are a few plans that might not do so. Covid-19 claims for domiciliary hospitalization for policies that do not cover it may be rejected by insurance companies.  It is vital to review the health insurance policy terms and conditions to confirm that domiciliary hospitalization is indeed covered, and under what conditions.
   
   The Government of India has issued guidelines to compensate for the scarcity of hospital beds by converting hotels and lodging homes into makeshift facilities. Patients getting treated at such temporary facilities would need to fulfill the following conditions for health insurance claim acceptance:
   • A certified Doctor should be visiting the premises for inspecting the patient’s health
   • A regular report should be maintained noting the patient’s oxygen levels and temperature, along with medicines prescribed.
   • The Doctor in-charge should issue a discharge report similar to hospital discharge summary upon the patient’s release.
6. Waiting Period: All health insurance policies specify a waiting period for many conditions, including coronavirus infection. This is usually 15 days, though some policies have a 30-day waiting period. Submission of Covid-19-related treatment claims during the initial waiting period is likely to face rejection. Also, if the policyholder has Covid at the time of or before purchasing the policy that was undisclosed, and submits the claim for settlement soon after policy issuance, such claims could be rejected as insurance companies will treat it as a pre-existing disease.

The Insurance Regulatory and Development Authority of India (IRDAI) has directed insurance companies to expedite settlement of Covid-19-related claims and has requested hospitals to aid patients’ timely treatment by permitting cashless admissions.

Wish you a healthy and happy life!