How Health Insurance Claims Are Processed?

by SMCIB on Tuesday, 13 June 2023

How Health Insurance Claims Are Processed?

When you buy a health insurance policy you want to ensure that, in both planned and unplanned medical situations, the financial costs of treatments are covered by the insurer.

And for every health insurance policy, the moment of truth comes when you make a claim. Because just as important as purchasing a health insurance policy is, it is equally important to ensure a smooth claim process.

In this article, we discuss how health insurance claims are processed. Let’s get started!

What is a Health Insurance Claim?

A health insurance claim is a request raised by you to your insurance company for compensating the medical expenses incurred. The insurer, after verifying the claim, either settles the bills with the hospital directly or reimburses you for the amount spent by you. This depends on the claim process you have chosen.

How are Health Insurance Claims Processed?

To understand the process of health insurance claims, you must know about the two methods of health insurance claim settlement. They are –

  1. Cashless Claim

    In a cashless claim, the healthcare expenses incurred by you or your family are settled directly by the insurer to the hospital. Cashless claims save a significant amount of time because you won’t need to spend time gathering documents, submitting them, and following up with insurers. The hospital insurance desk will handle the claim on your behalf.

    It is a convenient way of getting a health insurance claim settlement. The only thing that you need to ensure is that the hospital you get treatment is on the insurer’s list of network hospitals.

  2. Cashless Claim Process

    Here’s how a cashless claim process will work:

    • As a first step, you must inquire at the hospital if a cashless claim facility is available. If so, you must get a list of the documents that need to be submitted like the insurance policy copy, Identity proof, etc. In recent times, hospitals have begun to accept such proofs as a soft copy and so, you can have them ready by email for easy access.

    • The next step involves the hospital insurance desk contacting the insurance company for initial approval of medical expenses. This step is called the pre-authorization process. However, there are chances that the insurance company may not immediately provide the approval due to holidays or delays in their operational process. Thus, you must have handy cash to pay an advance to the hospital to initiate the treatment process.

    • Then, when you know about the discharge date, you must immediately contact the hospital insurance desk to get all bills ready for final approval. This will avoid any unwanted delays in the claim process.

    • The insurance company will verify all documents and bills and give their final approval which may take about 2-6 hours.

    • There are instances where the final approval gets delayed much further due to various reasons. Hence, it is up to you to decide to wait at the hospital until the claim gets approved or pay from your pockets then and get reimbursed from the insurer later.

    • You will get a claim settlement summary from the insurer that states whether your claim is approved or denied. The claim settlement summary will contain information on all of the expenses you incurred during your treatment. It will also include a list of both approved and unapproved expenses.

  3. Reimbursement Claim

    In a reimbursement claim, you first settle the hospital bills yourself and later get them reimbursed from the insurer. Once you get discharged from the hospital, you submit all relevant bills and receipts to get them approved by the insurance company. On approval, you will be reimbursed the bill amount.

    In this claim, you will have to do a major part of all the paperwork which can be tiresome and tedious. This type of claim comes into play when you get treated at a non-network hospital or if your cashless claim gets rejected.

  4. Reimbursement Claim Process

    Here’s how a reimbursement claim process will work:

    • The first step is to intimate the insurance company about your hospitalization. This has to be informed within 24 hours of getting admitted to the hospital and a day in advance if it is a planned medical treatment.

    • Compile all hospital bills and receipts with care. Submit them along with the required documents and a duly filled claim form to the insurance company.

    • If in case the insurance company requires you to submit any further documents or missed documents, you must make sure that they are given to them immediately.

    • Any queries raised by the insurer during the approval process must also be answered promptly.

    • Once the claim gets approved, you will receive a claim settlement summary that lists the reimbursement amount, the deductions made, and the expenses that are approved and rejected by the insurer. Any errors that you spot can be clarified with the insurer at this time.

    • Then, the reimbursement amount will get credited to the bank account that you have mentioned in the claim form.


health insurance policy is bought to cover your medical needs as it is better to be safe than sorry. In this article, we have explained all that you need to know about how to make a claim. It is best to know how to make the claim beforehand so that you can avoid any unwanted situations later.

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