What is a Health Insurance Claim Rejection?

A claim gets rejected when an insurance company or a carrier declines an individual’s request to pay for the medical services or hospitalization at a healthcare facility.

Buying a health insurance policy is the best way to safeguard your savings in case of a medical emergency or when an unexpected illness strikes. But while buying a policy has become easy, not all the claims that are raised, get settled. This article will discuss all the possible reasons for claim rejection so you are aware of them and you can avoid a claim rejection. And if your claim has been rejected, it is important to know why your health insurance claim was rejected. Knowing the reason will put you in a much better position to fight your claim rejection and have it covered even if it was denied originally.

Health Insurance Claim Denial Reasons

  1. A legitimate cause of claim rejection is non-disclosure of a pre-existing medical condition at the time of purchasing the health insurance policy.
  2. The claim can also be rejected if the medical treatment is taken during the waiting period. Policyholders must be aware that their policy covers certain diseases and ailments only after the completion of a waiting period of 3 or 4 claim-free years, depending on the policy.
  3. When the treatment or the surgical procedure is not covered under the health insurance policy, the claim can be rejected and nothing can be done to contest the decision.
  4. When the need for hospitalisation is not justified like in the case of headache or fever or when the tests are conducted for investigation purpose only, it is tough to fight the decision and win.
  5. When the date of admission is not covered under the policy or when the policy is not valid and does not exist, health insurance companies will not cover for any treatment and the claim will get rejected.
  6. When a claim is submitted after the policy expires, it is bound to get rejected.
  7. If the claim is submitted for an outpatient service where the hospitalisation was for less than 24 hours and if it does not fall under a covered day-care procedure in the policy, then your claim can get rejected.
  8. Another reason for claim rejection is, if the treatment was taken due to an injury that was inflicted with the intention of self-harm or if the ailment or accident was caused because the patient was under the influence of alcohol.
  9. If the claim has been filed for hospitalisation due to pregnancy-related complications or child birth including caesarean section, it may not be covered under the policy and so your claim can get rejected.
  10. Any claims filed to recover the cost of equipment and external aids that are not considered as an active line of treatment are not admissible.
  11. If the patient is hospitalised due to an ailment that falls under the category of congenital diseases such as congenital anaemia, thalassemia, cystic fibrosis or Down’s syndrome, then they may not be covered under the policy and this can get your claim rejected.
  12. If the physician is not clinically qualified to perform a specific procedure or if the treatment is taken at an unaccredited hospital, it can result in claim rejection.
  13. The entire policy becomes void if the insured has intentionally misrepresented any medical condition, circumstance or material fact, engaged in fraudulent conduct or made any false statement to claim the insurance money.
  14. Any claim that is filed for new or advanced treatment procedures that are unproven or experimental in nature and are not widely accepted like cyber knife or robotic surgeries, then your claim can get rejected as these procedures are excluded in most health insurance policies.
  15. If the insured does not submit claim intimation to the insurance company or the TPA  within 3 days of admission and is unable to justify the non-intimation then the claim can get rejected.
  16. If the insured fails to respond to the queries raised by insurance company even after being given 3 consecutive reminders, the claim can get rejected.
  17. If the claim form or bank details provided by the insured contain information that is inconsistent in terms of the patient’s name, date of admission, Government ID proof then the claim can get rejected.
  18. A claim can also get rejected if there are any inconsistencies in the medical bills, first consultation papers, the proof of services rendered is missing, the breakup of bill is not provided, reports are missing, the implant sticker is missing, or if the attending doctor is unable to justify the need for treatment or the hospital tariff.

But, if the claim has been rejected due to any of the following reasons then you can reverse the decision of the insurer:

  • Delay in submitting the medical claim
  • Delay in submitting the query documents
  • Failure to submit the papers of first consultation and medical treatments taken for case history
  • When the doctor’s clarification is missing in the submitted documents
  • If the rejection is frivolous like claim denial for stating medicals reasons that are false
  • If there are any mistakes in the medical documentation submitted by the hospital

What to do if Health Insurance Claim is Denied –

In case of health insurance claim rejection, you will be issued a notice that tells you how much time you have at hand to appeal health insurance claim denial. It is very important to know how long you have to initiate the process so you don’t miss out on the deadline. Fortunately, you can minus all of these hassles and stress with CMS’s expert advice. If you are facing any doubts with your appeal, get an opinion from experienced claim advisors and get your claim validated.

Here’s what you can do if your health insurance claim is denied:

  • If you want to reverse your denial, it makes perfect sense to consult the claim experts. At CMS  experienced advisors will do a thorough review of your case records and claim documents to give you your options and advice on plan of action. CMS’s professional review system will put you in a better position to open your appeal with accurate and complete information.
  • Next you can arrange all the required papers for the queries raised by the insurance company so your case is clearly represented. Since the claim processing is manual, it is prone to errors and there can be inaccuracies in interpreting your case. So, make sure you present all the facts and produce all the documents to make the process seamless.
  • Make sure you quote all the terms and conditions in the policy that you are going to use to contest the rejection. For instance if your claim was rejected because a certain treatment is not covered in your policy, then you need to choose the right terms in the policy to contest the rejection.
  • Avoid verbal abuse or an emotional approach in your dealings with the insurer. Always, be accurate and clear with your statements. Submit your grievances only via an email or letter so you have the records and be sure to collect the acknowledgement letter from the insurer.
  • If you are not happy with the decision then you can file grievance with the insurance company and if they still don’t resolve your grievance within a month, then you can file a complaint with the consumer court or the ombudsman.