Why cashless claims may be denied even after approval

Pre-authorizations are conditional, and final claims depend on review of the medical records

- Aprajita Sharma

Insurance regulator Insurance Regulatory and Development Authority of India (Irdai) mandated in May 2024 that insurers must decide on policyholders’ cashless pre-authorization requests within one hour of receiving documents from hospitals. The window extends to three hours for final authorization on discharge day.

While the move has broadly been welcomed, it has also created fresh troubles due to lapses in approvals that are later rejected. What happens when a patient gets approval within an hour, only to face rejection midway through treatment or on the day of discharge?

For many families, the sudden reversal turns into a financial emergency despite having insurance coverage.

Approval shock

Take the case of Jaipur-based Deepika Sharma. She was diagnosed with incompetence of cervix uteri during the fifth month of pregnancy. Her policy did not include maternity coverage. However, the treating doctor clarified that the condition had nothing to do with pregnancy and was merely diagnosed during pregnancy.

Sharma applied for pre-authorization and received approval. But on discharge day, the claim was rejected on the grounds that maternity treatment was not covered.

“They could have rejected pre-auth request itself. They had my policy details. Why initial approval and later rejection? We have reached out to the ombudsman,” said Sharma.

In another case, Bengaluru-based Ram Vaithya’s premature twins spent nearly two months in hospital after birth. A few months later, his son was hospitalized again with fever.