CLAIMS

MANAGEMENT
• The claims settlement process is one of the most important aspects of an insurance policy,
especially if it is a health cover.
A policyholder's health insurance claim can get settled by an insurer in two ways:
• third-party administrators (TPA)
• the insurer's in-house claims processing department.
ADVANTAGES OF IN-HOUSE CLAIMS
PROCESSING DEPARTMENT OVER TPAS
• The insurer builds a key differentiator on the claims handling front, around TAT and other
facilities.
• Building an in-house claims process allows the insurer to provide special offerings to
their policyholder from time to time.
• TPAs cannot take any judgement on claims and are only allowed to process them.
ADVANTAGES OF TPAS OVER IN-HOUSE
CLAIMS PROCESSING DEPARTMENT
• TPAs have their own hospital networks which is mostly larger than an in-house claim
settlement department of an insurance company.
• The extent of coverage provided by some of the largest TPAs for cashless is higher than
most insurance companies in India.
• TPAs are focused toward claim management process and have streamline processes for it.
• Standardization of processes
STAKEHOLDERS
TYPES OF CLAIMS

• Cashless
• Reimbursement
CLAIM INTIMATION

• Intimation
• Claim intimation is the first instance of contact between the customer and the claims team. The customer could inform the company that he is
planning to avail a hospitalization or the intimation would be made after the hospitalization has taken place, especially in case of emergency
admission to a hospital.

• Typically it is required before hospitalization in case of planned admission, and within 24 hours of hospitalization in case of an emergency.

• The timely availability of information about hospitalization helps the Insurer/TPA to verify that the hospitalization of the customer is genuine and
there is no impersonation or fraud and sometimes, to negotiate the charges.

• Intimaion earlier meant ‘a letter written, submitted and acknowledged’ or by fax. With development in communication and technology, intimation
is now possible through call centres run by insurers/TPAs open 24 hours as well as through the internet and e-mail.
REGISTRATION

• Registration of a claim is the process of entering the claim in the system and creating a
reference number using which the claim can be traced any time.
• This number is called Claim number, Claim reference number or Claim control number.
The claim number could be numeric or alpha-numeric based on the system and processes
used by the processing organization
• Registration and generation of a reference no. is usually done once the claim intimation is
received and the correct policy number and insured person’s particulars are matched.
VERIFICATION OF DOCUMENTS

• The documentary evidence of the illness

• Treatment provided
• In-patient duration
• Investigation Reports
• Payment made to the hospital
• Further advice for treatment
• Payment proofs for implants etc.
CAPTURING THE BILLING INFORMATION

Billing is an important part of the claim processing cycle. Typical health insurance policies provide for indemnifying
expenses incurred in the treatment with specific limits under various heads. The standard practice is to classify the
treatment charges into:
• Room, board and nursing expenses including registration and service charges.
• Charges for ICU and any intensive care operations.
• Operation theatre charges, anaesthesia, blood, oxygen, operation theatre charges, surgical appliances, medicines and
drugs, diagnostic materials and X-ray, dialysis, chemotherapy, radiotherapy, cost of pacemaker, artificial limbs and any
medical expenses incurred which is integral part of the operation.
• Surgeon, anaesthetist, medical practitioner, consultant's, specialists fees.
• Ambulance charges.
• Investigation charges covering blood test, X-ray, scans, etc.
• Medicines and drugs.
• Documents submitted by the customer are examined to capture information under these heads so that the settlement of
claims can be done with accuracy.
PACKAGE RATES

• Many hospitals have agreed package rates for treatment of certain diseases.
• This is based on the ability of the hospital to standardize the treatment procedure and use
of resources.
• In recent times, for treatment at Preferred Provider Network and also in case of RSBY,
PMJAY package cost of many procedures has been pre-fixed.
CODING OF CLAIMS

• The most important code set used is the World Health Organization (WHO) developed
International Classification of Diseases (ICD) codes.

• While ICD is used to capture the disease in a standardized format, procedure codes such
as Current Procedure Terminology (CPT) codes capture the procedures performed to
treat the illness. (US based )
PROCESSING OF CLAIM

• A reading of the health insurance policy shows that while it is a commercial contract, it
involves medical terms that define when a claim is payable and to what extent. The heart
of claims processing in any insurance policy, is in answering two key questions:
• Is the claim payable under the policy?
• If yes, what is the net payable amount?

• understanding of a number of terms and conditions of the policy issued as well as the
rates agreed with the hospital in case treatment has taken place at a network hospital.
NON-PAYABLE ITEMS IN A HEALTH CLAIM

The expenses incurred in treating an illness can be classified into:

• Expenses for cure
• Expenses for care
• Expenses for curing an illness comprise of all the medical costs and the normal related facilities. In addition, there
could be costs incurred to make the stay in a hospital more comfortable or even luxurious.
• A typical health insurance policy attends to the expenses for curing an illness and unless stated specifically, the
extra expenses for luxury are not payable.
• These expenses can be classified into non-treatment charges such as registration charge, documentation charges,
etc. and to items that can be considered if directly relating to the cure (e.g. protein supplement during the inpatient
period specifically prescribed).
 STEPS
Step I List all the bills and receipts under the various heads of room rent,
consultant fee, etc.

Step II Deduct the non-payable items from the amount claimed under each
head

Step III Apply any limits applicable for each head of expense

Step IV Arrive at the total payable amount and check if it is within sum
insured overall

Step V Deduct any co-pay if applicable to arrive at the net claim payable
PAYMENT OF CLAIM

• Once the payable claim amount is arrived at, payment is done to the customer or the hospital as the
case may be.
• The approved claim amount is advised to the Finance / Accounts function and the payment may be
made either by cheque or by transferring the claim money to the customer’s bank account.
• When the payment is made to the hospital, necessary tax deduction, if any is made from the
payment.
• Where the payment is handled by the Third Party Administrator, the payment process may vary from
insurer to insurer
DENIAL CLAIMS

• The experience in health claims show that 10% to 15% of the claims submitted do not fall within the terms of the
policy. This could be because of a variety of reasons some of which are:

Date of admission is not within the period of insurance.

• The Member for whom the claim is made is not covered.
• Due to Pre-existing illness (where the policy excludes such condition).
• Undue delay in submission without valid reason.
• No active treatment; admission is only for investigation purpose.
• Illness treated is excluded under the policy.
• The cause of illness is abuse of alcohol or drugs
• Hospitalization is less than 24 hours.
• Denial or repudiation of a claim (due to whatever reason) has to be informed to the customer in writing. Usually, such denial
letter clearly states the reason for denial, narrating the policy term / condition on which the claim was denied.
•  
• Most insurers have a process by which a denial is authorized by a manager senior to the one authorized to approve the claim.
This is to ensure that any denial is fully justified and will be explained in case the insured seeks any legal remedy.
• Apart from the representation to the insurer, the customer has the option, to approach the following in case of denial of claim:

• Insurance Ombudsman or
• The consumer forums or
• IRDAI or
• Law courts.
SUSPECT CLAIMS FOR MORE DETAILED INVESTIGATION
 

• Insurers have been trying to handle the problem of fraud in all lines of business. In terms of sheer number of fraud
claims handled, health insurance presents a great challenge to the insurers.
• Few examples of frauds committed in health insurance are:
• Impersonation, the person insured is different from person treated.
• Fabrication of documents to make a claim where there is no hospitalization.
• Inflation of expenses, either with the help of the hospital or by addition of external bills fraudulently created.
• Outpatient treatment converted to in-patient / hospitalization to cover cost of diagnosis, which could be high in
some conditions
• With newer methods of frauds emerging on a daily basis, the insurers and TPAs have to continuously monitor the
situation on the ground and come up with measures to find and control such frauds.
 CASHLESS SETTLEMENT PROCESS BY TPA
 
  A customer covered under health insurance
  suffers from an illness or sustains an injury
Step 1
and so is advised admission into a hospital.
He/she (or someone on his/her behalf)
approaches the hospital’s insurance desk with
the insurance details such as:
 
i. TPA name,
ii. His membership
iii.Insurer number,
name, etc .
  The patient is treated by the hospital, keeping the amount authorized by the TPA
as credit in the patient’s account. The member may be called on to make a deposit
Step 4 payment to cover the non-treatment expenses and any co-pay required under the
policy.

  When the patient is ready for discharge, the hospital checks the amount of credit
  in the account of the patient approved by the TPA against the actual treatment
charges covered by insurance.
   
Step 5 If the credit is less, the hospital requests for additional approval of credit for the
cashless treatment.
 
TPA analyses the same and approves the additional amount.
  The patient is treated by the hospital, keeping the amount authorized by the
TPA as credit in the patient’s account. The member may be called on to make
Step 4 a deposit payment to cover the non-treatment expenses and any co-pay
required under the policy.

  When the patient is ready for discharge, the hospital checks the amount of
  credit in the account of the patient approved by the TPA against the actual
treatment charges covered by insurance.
   
Step 5 If the credit is less, the hospital requests for additional approval of credit for
the cashless treatment.
 
TPA analyses the same and approves the additional amount.

  Patient pays the non-admissible charges and gets discharged. He will be asked
to sign the claim form and the bill, to complete the documentation.
Step 6
  Hospital consolidates all the documents and presents to the TPA the following
  documents for processing of the bill:
 
   
 
i. Claim form
Step 7
ii. Discharge summary / admission notes
iii. Patient / proposer identification card issued by the TPA and photo ID proof.
iv. Final consolidated bill
v. Detailed bill
vi. Investigation reports
vii. Prescription and pharmacy bills
viii.Approval letters sent by the TPA
  TPA will process the claim and recommend for payment to the hospital after verifying
  details such as the following:
 
   
  i. The Patient treated is the same person for whom approval was provided.
Step 8 ii. Treated the patient for the same condition that it requested the approval for.
iii. Expenses for treatment of excluded illness, if any, is not part of the bill.
iv. All limits that were communicated to the hospital have been adhered to.
v. Tariff rates agreed with the hospital have been adhered to, calculate the net
payable amount.
DOCUMENTATION IN HEALTH INSURANCE
CLAIMS
• Discharge summary • Presenting Complaints with Duration and Reason for
• As per IRDAI Standardization Guidelines the contents of a Admission
standard Discharge Summary are as follows: • Summary of Presenting Illness
•   • Key findings on physical examination at the time of
• Patient’s Name admission
• Telephone No / Mobile No • History of alcoholism, tobacco or substance abuse, if any
• IPD No • Significant Past Medical and Surgical History, if any
• Admission No • Family History if significant/relevant to diagnosis or
• Treating Consultant/s Name, contact numbers and Department / treatment
Specialty
• Summary of key investigations during Hospitalization
• Date of Admission with Time
• Course in the Hospital including complications if any
• Date of Discharge with Time
• Advice on Discharge
• MLC No / FIR No
• Provisional Diagnosis at the time of Admission • Name & Signature of treating Consultant/ Authorized
• Final Diagnosis at the time of Discharge Team Doctor
• ICD-10 code(s) or any other codes, as recommended by the • Name & Signature of Patient / Attendant
Authority, for Final diagnosis
 INVESTIGATION REPORTS
 

• Investigation reports assist in comparing the diagnosis and the treatment, thereby providing the necessary
information to understand the exact condition that prompted the treatment and the progress made during the
hospitalization
• Investigation reports usually consist of:
• Blood test reports;
• X-ray reports;
• Scan reports

• Biopsy reports
• All investigation reports carry the name, age, gender, date of test etc. and typically presented in original. The
insurer may return the X-ray and other films to the customer on specific request
CONSOLIDATED AND DETAILED BILLS:

• This is the document that decides what needs to be paid under the insurance policy. Earlier there was
no standard format for the bill, but IRDAI Standardization Guidelines provide format for
consolidated and detailed bills
• While the consolidated bill presents the overall picture, the detailed bill will provide the break up,
with reference codes.
• Scrutiny of non-payable expenses is done using the detailed bill, where the non- admissible expenses
are rounded off and used for deduction under the expense head to which it belongs.
• The bills have to be received in original.
RECEIPT FOR PAYMENT

• Being a contract of indemnity, the reimbursement of a health insurance claim will also
require the formal receipt from the hospital of the amount paid.
• While the amount paid must correspond to the total of the bill, many hospitals do provide
an element of concession or discount in the payable amount. In such a case, the insurer is
called to pay only the amount actually paid on behalf of the patient.
• The receipt should be numbered and or stamped and be presented in original
CLAIM FORM
 

• Claim form is the formal and legal request for processing the claim and is submitted in original signed by the customer. The claim form has now been
standardized by IRDAI and broadly consists of:
• Details of the primary insured and the policy number under which the claim is made.
• Details of the insurance history
• Details of the insured person hospitalized.
• Details of the hospitalization such as hospital, room category, date and time of admission and discharge, whether reported to police in case of accident, system
of medicine etc.
• Details of the claim for which the hospitalization was done including breakdown of the costs, pre and post-hospitalization period, details of lump-sum/cash
benefit claimed etc.
• Details of bills enclosed
• Details of bank account of primary insured for remittance of sanctioned claim
• Declaration from the insured.
• Besides information on disease, treatment etc., the declaration from the insured person makes the claim form the most important document in the legal sense.
IDENTITY PROOF

• With the increasing use of identity proof across various activities in our life, the general proof of identity
serves an important purpose – that of verifying whether the person covered and the person treated are one and
the same.
• Usually identification document which is sought could be:
• Voters identity card,
• AADHAR card
• Driving license,
• PAN card,
• Aadhaar card etc.
DOCUMENTS CONTINGENT TO SPECIFIC CLAIMS

There are certain types of claims that require additional documents apart from what has been stated above. These are:
• Accident claims, where FIR or Medico-legal certificate issued by the hospital to the registered police station, may be required. It
states the cause of accident and if the person was under the influence of alcohol, in case of traffic accidents.
• Case indoor papers in case of complicated or high value claims. Indoor case paper or case sheet is a document which is maintained at
the hospital end, detailing all treatment given to patient on day to day basis for entire duration of hospitalization.
• Dialysis / Chemotherapy / Physiotherapy charts where applicable.
• Hospital registration certificate, where the compliance with the definition of hospital needs to be checked.
• The claims team uses certain internal document formats for processing a claim.
• These are:
• Checklists for document verification,
• Scrutiny/ settlement sheet
• Quality checks / control format.
• THANK YOU