Health Insurance Claim Process: Reimbursement & Cashless

Health Insurance Claim Process: Reimbursement & Cashless

Health insurance is a vital aspect of modern life, providing financial security and peace of mind in times of illness or injury, such as in case of when you are going to undergo knee surgery and you are looking out for the best orthopedic hospital, the need for health insurance arises.

To access the benefits of health insurance, policyholders often need to navigate the complex world of health insurance claims.

Two common methods for processing claims are reimbursement and cashless. In this post, we will delve into the intricacies of both processes, examining the advantages, and disadvantages, and how they impact policyholders and healthcare providers.

Reimbursement Claims

Reimbursement claims are a traditional and widely used method in the health insurance industry. In this process, policyholders just have to pay for medical expenses out-of-pocket at the time of service. They collect all necessary documents, such as bills, prescriptions, and medical reports, and then submit a claim to their insurance company.

For instance, if you had to undergo knee surgery and were searching for a renowned knee replacement hospital, then here, in this case, the insurer would review the proper set of documents and reimburse the policyholder for the eligible expenses.

One of the important advantages of reimbursement claims is the flexible environment they offer. Policyholders can choose their healthcare providers, as they are not confined to a chain of doctors or hospitals.

This gives individuals the freedom to seek medical care wherever they prefer. It is also an excellent option for those who may need specialized care that is not available within the insurer’s network.

However, the reimbursement procedure comes with several limitations. Firstly, policyholders are required to pay for medical services upfront, which can be financially burdensome, especially in the case of expensive treatments or surgeries.

Adding more to it, the reimbursement process can be tedious and a fully time-consuming process because it includes collecting, organizing, and submitting documents to the insurance company. The reimbursement turnaround time can also fluctuate, leading to delayed payments for policyholders.

Healthcare providers also have to face difficulties with reimbursement claims. They may need to assist patients in the claims process, which can be time-intensive and administratively burdensome.

Moreover, there is a risk of payment delays or even claim denials, which can disrupt the cash flow of healthcare facilities.

Cashless Claims

Cashless claims represent a more convenient and streamlined approach to accessing health insurance benefits. In this whole process, policyholders can avail of medical services within the network of hospitals and healthcare providers without paying upfront. 

Instead, the insurance company directly settles the bill with the healthcare provider, and the policyholder is only responsible for any deductible expenses. One of the primary merits of cashless claims is immediate access to medical care without financial liability.

This is particularly advantageous in emergencies or for individuals who may not have substantial financial savings to cover medical expenditures upfront. Cashless claims also simplify the process for policyholders, as they do not have to engage in extensive paperwork or claim submissions. 

However, the cashless claims process comes with its own set of limitations. Policyholders are quite often restricted to the insurer’s network of healthcare providers.

This can limit their preference for doctors or hospitals and may not be suitable for those seeking specialized care. In such cases, individuals may be required to revert to the reimbursement process.

For healthcare providers, the cashless claim system can be a bit favorable because it makes sure of the prompt and guaranteed payment for services rendered to insured patients. They are also relieved of the administrative work that lies in association with helping patients with reimbursement claims.

The Claims Procedure

The below-mentioned steps are involved in the reimbursement and cashless claims process and are more prone to vary among insurance companies.

Still, certain common factors exist in all sorts of insurance companies.

For reimbursement claims, policyholders are required to:

  • Pay for medical services at the time of ongoing treatment.
  • Collection of all relevant documents, including bills, prescriptions, and medical reports.
  • Submit these documents to the insurance company within the stipulated time framework.
  • Await the review and processing of the claim.
  • Receive reimbursement for eligible costs incurred.

While on the other hand, cashless claims typically involve the following steps.

  • Seek medical treatment at an in-network hospital.
  • Provide the insurance details and complete the required mandatory paperwork.
  • The insurer directly settles the bill with the healthcare provider.
  • Policyholders may be required to pay any deductible expenses.

It is quite important to note the fact that policyholders should understand the terms and conditions of their insurance policy and be cognizant of any limitations or exclusions to ensure a smooth claims process.

Going for the Right Approach

The choice between reimbursement and cashless claims totally depends on the circumstances of an individual along with their needs, preferences, requirements, and some other factors.

There should be certain factors that are required to be considered. These are discussed below:

Financial Capability

Reimbursement claims need policyholders to pay upfront, so those who may not have the financial capacity to do so may prefer cashless claims.

Choice of Healthcare Providers

Those who have a strong preference for a specific doctor or hospital may lean towards reimbursement claims to have the flexibility to select their care providers.

Emergency Situations

In case of emergencies, cashless claims offer immediate access to medical care without the need to arrange for funds beforehand.

Insurance Network

It is really crucial to have a close check on the network of hospitals and healthcare providers covered by the insurance policy.

Those living in areas with a robust network may find cashless claims more convenient.

Policy Coverage

Policyholders should be aware of the extent of coverage offered, as it can vary between reimbursement and cashless claims.

Administrative Effort

Consider the amount of paperwork and documentation required for each claim type. Cashless claims typically involve less administrative effort for policyholders.


The health insurance claim process, irrespective of its type, is an essential component of the healthcare system.