Which is better: Cashless Claim Settlement vs Reimbursement Claim Settlement Process?

Claim settlement plays an imperative role in the field of health insurance. While purchasing health insurance policies from eminent insurers, policyholders expect their insurance companies to offer assistance under any medical emergency. To satisfy the expectations of customers, the insurance companies are also trying to improve their claim settlement process. In health insurance, there are primarily two types of claim settlement process: cashless claim and Mediclaim reimbursement process. Both approaches have some upsides and downsides that you can’t shun at any cost. So let’s dig deeper and find out which one is better, medical claim reimbursement or cashless claim settlement?

In this digital-driven era, companies are leveraging various technologies to meet all the expectations of their policyholders with the claim settlement process. For example, insurance companies are implementing New-fangled technologies like artificial intelligence, robotic process automation, and blockchain to improve their claim settlement process. In addition, many companies have adopted a cashless insurance claim settlement process (a tech-driven approach) to make their claim settlement process smoother and facile.

Before plunging into the debate (which one is better: cashless health insurance process or reimbursement process in health insurance), you should have adequate knowledge about some important terminologies related to this field.

• Network Hospital

A network hospital is a hospital that has partnered with the health insurance/Mediclaim company and offers a hassle-free claim settlement process to policyholders.

• Third-Party Administrators (TPA)

TPAs are different organizations associated with health insurance/Mediclaim companies and are helping them manage their claim settlement processes. These organizations usually coordinate the entire process.

• Cashless Claims

A cashless claim implies a policyholder doesn’t need to pay anything for his/her treatment if he/she gets admitted to a network hospital. Because in a cashless claim process, the insurance company used to settle the bill with the hospital directly.

• Reimbursement Claims

In the case of the health insurance reimbursement process, first, you need to pay the hospital bill for your treatment. Then, you can submit the claim reimbursement application to your insurer for the reimbursement process in health insurance.

Process of Claim Settlement: Cashless vs Reimbursement Claim

The claim settlement process is not the same for both types.

 In a cashless claim process,

• For a pre-planned hospitalization, the policyholders need to intimate the insurance company in advance.
• In case of emergencies, you need to inform the insurer or its third-party agents as soon as possible (within 24 hours) after hospitalization.
• The policyholder needs to fill up a pre-authorization form for the approval of the treatment
• The insurance company settles the bills directly with the hospitals

In the case of the health insurance reimbursement process,

• Policyholders need to pay all the expenses of the hospitals from their pockets. The policyholder should collect every single bill for the treatment.
• After getting discharged from the hospital, the policyholder must submit the discharge summary and all the bills to the insurer to avail reimbursement.
• The insurer will verify the bills and, if satisfied, the company will initiate the reimbursement process.

Which one is better: Cashless or Reimbursement?

A cashless claim process is always better than a claim reimbursement process. Because the cashless process is simpler and convenient. Medical emergencies can hit anyone at any time. That’s why people used to purchase health insurance policies to safeguard their family members.

With a cashless health insurance process, you don’t need to pay a single penny from your pocket in case of hospitalization. But in the case of a reimbursement claim model, you need to bear all the expenses initially. Therefore, a cashless claim process also lessens the financial burden on the patient and family members as your insurance company settles the bills directly with the hospital.

But you need to remember that you can only be eligible for a cashless claim if you are admitted to your insurance company’s network hospital. Thus, you should prudently choose an insurer with a long list of network hospitals to enjoy the benefits of the cashless claim.

Though the cashless claim process is better in terms of convenience and simplicity, the reimbursement model is not distorted. This process is time-consuming and laborious. You need to collect all the bill receipts and important documents properly and then apply for claim reimbursement. This might consume some time. But if you submit everything properly, the insurance company will certainly pay the claim.

In the claim reimbursement process, you also need to have some money at your hand to pay the hospital bills during the time of discharge. In case of an emergency, you can get admitted to any hospital and apply for reimbursement. But the cashless claim process won’t provide any such facility to policyholders.

If you want to compare both these claim processes in terms of convenience, then cashless settlement will surpass the reimbursement claim settlement process.

These days, all established insurance companies embrace their policyholders with a wide range of hospitals for their treatment. Thus, you may not struggle to search for a network hospital during the time of emergency. If you still feel that your current health insurer is not equipped with a proper list of network hospitals, you can switch to another health insurance company at the time of renewal. 

Thus, choosing an insurer wisely after evaluating all health insurance plans from various insurers is always recommended. Moreover, while selecting a health insurance company, also check its claim settlement ratio. A claim settlement ratio will give you an idea about how authentic your insurance company is and how fast it can settle your claim. After evaluating all these parameters, choose your insurance company wisely so that you won’t face any difficulty during the time of the claim settlement process.