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All you need to know: handling health insurance claim disputes

With the advent of the second coronavirus wave in India and the rising number of health insurance claims, there has been a considerable delay in payouts, especially reimbursement claims. Only 57% of the total Rs 15700 crores worth of covid-related health insurance claims, i.e. only Rs 9000 crores, have been settled to date as of April 2021, according to the IRDAI data. Rs 6700 crores of claim was still pending approval. There has been a 22% jump in the total number of claims in April 2021 compared to March 2021.

There is no doubt that the total number of cases have exceeded way more than the system can efficiently handle; the process can indeed be streamlined. The IRDAI has stepped forward to simplify the cashless claims within 1 hour, resulting in lower rejection.

The health insurance industry has also grown by 27% in the last FY2020 with Rs 516 billion worth of premium collection. With the industry growing at this pace, there are bound to be good and bad experiences. The primary purpose of availing of a health insurance plan is to get an excellent claim experience. However, if that leads to a dispute, the claim experience can get a little messy altogether. Though the claim process has been eased up, there might be instances when a conflict might arise at the time of claims.

Health Insurance Disputes

Disputes arise when you are not satisfied with the claim settlement offered by the insurance company. In that case, you can raise a complaint with the insurance company and dispute the claim settlement. Thus, a dispute arises from a disagreement between the two involved parties.

However, the good news is that all insurance companies have eased up the claim process by offering the online mode of claim intimation and mobile applications. This allows you to get hassle-free claim settlements in your health insurance policy and dispute resolution without having to go over physically. In addition, every insurer has its own grievance redressal escalation matrix on its website as well. 


Most disputes in health insurance are related to claims. 

Here are some of the most common instances when you might dispute the claim under your health insurance policy –

  1. If the insurance company has rejected your claim payment altogether
  2. If the insurance company has not dismissed the claim but settled the claim partially and you believe that you are eligible to avail of a higher settlement
  3. If the policy does not cover some medical expenses, and you dispute that such costs should be covered
  4. If there is a delay in claim settlement
  5. If there is no proper communication from the insurer regarding the claim settlement and the deductions.

Some claims are related to the disputes between a health insurance company and hospital based on over-charging by the hospitals despite their SLA (service level agreement) and General Insurance Council capping the rate structure. Although the policyholders are nowhere at fault, they are being penalised in the process. 

So, what should you do in case of a dispute over your claims? Here is a step-by-step process to guide you through.

Steps to handle health insurance claim disputes:

If there is any dispute with regards to your health insurance claim, here’s how you can handle them –

Step 1: Do a self-assessment 

The first step is to check the policy’s coverage benefits and terms and conditions. If the claim is not paid or paid partially, you should find out whether the unpaid expenses fall under the policy’s scope of coverage. The costs might be excluded from the coverage, or your policy might have lapsed, due to which the claim would have been rejected. So, the first step in handling a dispute is to do your due diligence. Read the fine print of your policy. If there is a delay in processing the claim, typically in case of a reimbursement claim, check the insurer’s website for their TAT (Turn Around Time), which is usually mentioned like:


Turn Around Time for Claim Processing (this is just an estimation and could vary from insurer to insurer):

Claim StageTAT (in days)
Documents Uploaded0 (i.e. the day the documents are uploaded/emailed/received by the TPA or the insurer is considered as Day 0)
Under Process0-3 (i.e. it takes the initial 3 days for the TPA/insurer to go through the documents and check discrepancy)
Claim Pass/ Rejected/ Raise Query3-10 (i.e. it takes the next 7 days for the TPA/insurer to pass a judgement on whether the same is passed or rejected or there is another query 
Claim Settlement10-15 (i.e. it takes another 5 days for the money to get credited into your bank account)


However, if a query is raised and further documents are submitted, the process starts from Day 0 again!

Also, each claim, whether partially paid or rejected, would have a “Claim Settlement Letter”, which lists the items not payable and a justification for the same. Here is an example of an actual Claim Settlement Letter for a cashless Covid Claim Settlement in April 2021.

If needed, take the help of experts before filing a dispute.

Step 2: Approaching the grievance redressal department of the insurer

If you believe that your claim was wrongly handled, you can raise your complaint with the grievance redressal department of the insurance company. Every company has a dedicated department to handle customer complaints and disputes. This would also be the first step in seeking formal redressal for your conflicts. The escalation matrix details would ideally be displayed on the official website of the insurer.

Intimate the grievance redressal department of the insurance company and state the dispute in as much detail as possible. Also, attach your policy bond and other medical reports and bills so that they can check the basis of the conflict and verify it.

After the assessment, the grievance redressal department would offer a solution. If the answer is to your liking, your dispute would be resolved, if not, you can escalate the matter further according to the TAT provided.

Step 3: Lodge a complaint with the IRDA’s Grievance Management System

IRDAI has a dedicated team for Grievance Redressal with a Grievance Redressal Officer(GRO). You can send an email or a letter with the supporting documents for the GRO to take action. You have a list of all the GRO’s for every single insurance company

If you are not happy with the resolution of the GRO or you do not get a response in 15 days, you can approach the Grievance Redressal Cell of the Consumer Affairs Department of the IRDAI. You can call their toll free number at 155255 / 1800 4254 732 or send a detailed email to complaints@irdai.gov.in with the attachment of your earlier complaints. 

Also, log a complaint in the IRDA’s integrated portal of IGMS (Integrated Grievance Management System) at https://igms.irda.gov.in/. You can also log a physical complaint by downloading the Complaint Registration Form, filling it up with enclosures. It can be couriered to the:

General Manager, Consumer Affairs Department- Grievance Redressal Cell, Insurance Regulatory and Development Authority of India(IRDAI), Sy.No.115/1,Financial District, Nanakramguda, Gachibowli, Hyderabad-500032.

Step 4: Approach the Insurance Ombudsman


The next step for your complaint is with the Insurance Ombudsman. The Insurance Ombudsman has been appointed specifically to handle out-of-court insurance-related disputes. The Ombudsman is a non-judicial authority who acts as an arbitrator between you and the insurance company. The Ombudsman, however, can handle disputes up to a maximum of Rs 20 lakhs. 

You can take your dispute to the Insurance Ombudsman, and they would find out the real cause of the conflict. They would speak to the insurance company to hear its side of the story as well as yours. The Ombudsman would then deliberate and give its recommendation within 1 month or its verdict within 3 months.

If you accept the Ombudsman’s ruling, you can signify your acceptance, and the insurance company would have to comply with what the Ombudsman has ordered within the specified period. 

You, however, are not mandated to abide by the Ombudsman’s rulings. If you are dissatisfied, you can take your dispute to judicial authorities to escalate it further.


Final step: The judicial route

There are two options for you to take your dispute to the judiciary level. First is the consumer forum, wherein you can lodge the dispute and follow legal proceedings to get a solution. The second is the High Court of your State. If you are dissatisfied with the High Court’s ruling, you can take the dispute to the Supreme Court. However, once the Supreme Court gives its verdict, you would have to accept it.


The process has been summarised as:

Flow of claim

To wrap it up:

Thus, there are various routes for dispute resolution if you are dissatisfied with the insurer’s handling of your claims. Choose your preferred way and seek redressal for your complaints. However, before escalating your dispute to the judiciary level, do check if the insurance company is to be blamed or not. There could be a technicality that you might overlook and create a claim-related dispute.

So, check your grievance thoroughly. Then, if you believe that the insurance company is at fault, you can appeal to the country’s highest judicial authority and seek resolution for the dispute. 


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