Health Insurance September 14, 2020

Difference Between a Cashless Claim and a Reimbursement Claim

Medical emergencies often come uninformed, and if you do not have a medical insurance plan ready, they can hurt your finances in a manner you can’t imagine. The reason being the massive medical bill in India can easily break an individual’s back if he or she is not financially strong. To deal with such emergencies, people opt for different kinds of Health Insurance Plans provided by several insurance providers. An insurance plan helps customers get them claims when they are dealing with some medical conditions. But a large portion of customers doesn’t pay much attention to the modes of Insurance Claim provided by Health Insurance.

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One of the most important aspects of choosing a suitable insurance plan is its Claim Process and how hassle-free it is. A Health Insurance Claim can be settled through two popular methods — Cashless Claim and Reimbursement Claim. When looking for a Health Insurance Plan, it is important to understand the claim settlement process of your plan. And in the process of knowing this, it is important to know the difference between a Cashless Claim and a Reimbursement Claim.

Any individual who is looking to get Health Insurance should know about both of them so that there won’t be any confusion at the time of settling insurance claims. In this article, we will cover extensively about both Cashless Claim and Reimbursement Claim. After knowing it, you would be in a better position to choose the suitable one for you. So, let’s start.

Know the Basic Difference Between a Cashless Claim and Reimbursement Claim

As we said, there are only two methods of Claim Settlement for your insurance plan and these are Cashless and Reimbursement. First, we are showing the basic differences between these two methods and then, we will talk about them separately. Please check them out.

  1. The first difference between a Cashless and a Reimbursement Claim is the burden of medical claims on the customers. In the case of Cashless Claims, the person doesn’t need to bear any kind of medical expenses as they are directly settled by the insurer or the TPA. While in the case of the Reimbursement Plan, a customer has to bear all the medical expenses first and get the reimbursement from the insurer after getting discharged from the hospital. As you can see, most of the people opt for Cashless Claims nowadays.
  2. Due to the cashless facility, the customer doesn’t need to collect any kind of bill or any other expense-related documents. On the other hand, a customer needs to collect all the bills carefully for reimbursement purposes later. On missing any of the expenses related papers, the insurer may reject a customer’s claim.
  3. Under the Cashless Claim process, each Insurance company has a list of hospitals where customers can avail treatment and the company will directly settle the medical bills with the hospital. So, a customer can get treatment only in the network hospital specified by the Insurer. While in case of a Reimbursement, a customer can avail treatment at any hospital and later reimburse the expenses by submitting all the bills, discharge summary and other documents.
  4. Now coming to the most important difference between the two — Claim Settlement Time. In this aspect, a cashless claim trumps a reimbursement claim by miles as the cashless claims are settled instantly while reimbursement claims take a long time. The reason is quite clear; a customer has to follow a due procedure in case of reimbursement within specified days of expenses. The insurer will verify the claim and then reimburse the expenses.
  5. Cashless Claims are totally smooth and have zero financial burdens while a customer may have financial stress in the case of a Reimbursement Claim as he or she has to bear the expenses first which can be a bit heavy on the pocket.

So, these are the differences between a cashless claim and a reimbursement claim. Now, let’s know about how these settlement methods work separately.

How Does a Cashless Claim Work?

No one wants to face lengthy documentation and paperwork in a medical emergency. Without suitable insurance for yourself, you can have financial hassles with ongoing emotional stress. To minimize it completely, you can opt for a Cashless Settlement method on your insurance plan. As we said before, with this method, customers don’t need to bear any kind of expenses related to the hospital. But you must be thinking about how this method works.

If there’s an emergency hospitalization and you don’t have the required sum of money, you should go to a network hospital (attached with the insurer) only so that you can get the claim settlement easily. You should inform the Insurance Company or the Third Party Administrator (TPA) within 24 hours of emergency hospitalization. The TPA works as a bridge between you and the insurer and helps you settle claims. After hospitalization, the authorities over there will fill up the required form about the estimation of your bill on the initial diagnosis and treatment. After this, they will give this form to the TPA who will submit it to your insurer. You will get notified about the approval in the shortest time possible and you don’t need to pay anything to the Hospital. In case of rejection, you may need to pay the bill by yourself and solve the matter afterward with your TPA.

A Cashless Claim method can be beneficial for those customers who cannot arrange a huge sum of money at the short notice. So, you can admit yourself or the other insured ones to a hospital without worrying about finances. Also, in the case of Cashless claims, the company pays directly to the hospital without any waiting period.

How Does a Reimbursement Claim Work?

It is simply opposite to the Cashless Claim method as customers need to pay their bill first and they get the reimbursement later. If individuals don’t go to any of the network hospitals, they would need to pay the bills by themselves. So, how do customers get reimbursement? Well, first things first, the reimbursement claim method is lengthy and involves a lot of paperwork. During the treatment, you need to make sure to collect all the documents carefully.

These documents include Discharge Summary, Hospital Expenses, Prescriptions, Medicine Bills, Test Reports, Diagnosis Reports, etc. You shouldn’t miss any of the bills related to your treatment, otherwise, it would be difficult for you to get the reimbursement. The discharge summary or certificate we told earlier will be given to you at the time of discharge from the hospital. As soon as you get discharged, submit all the documents and discharge summary to your insurance company.

You should inform your company or TPA as soon as possible as several insurer companies ask to inform them within 30 days of expenses made by you. After receiving the documents, the company will scrutinize the bills thoroughly and you will get the reimbursement in your account.

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