How Initial Approval Works in Health Insurance ?
The Role of Initial Approval in Health Insurance
Initial approval in health insurance, also called pre-authorisation, is granted by the insurance company or third-party administrator (TPA) for medical treatment or medical procedures. This step is crucial in the cashless claim process, as it indicates that your insurer has acknowledged the claim and will assess it based on the initial information provided. Additionally, initial approval ensures that the treatment being requested is both medically necessary and covered by the insurance plan. It can also help lower costs, prevent harmful medication interactions, and eliminate unnecessary treatments.
However, it is important to understand that while initial approval allows treatment to begin, it does not ensure final approval or claim settlement. It acts as the first checkpoint in the health insurance claim process.
Understanding Initial Approval in Detail
When a policyholder requires medical treatment, especially in the case of planned procedures, they can take advantage of the cashless facility if the hospital is part of the insurer's network.
Here's where initial approval comes into play:
1. Purpose of Initial Approval: Initial approval ensures that the proposed treatment or procedure aligns with the terms and conditions of your insurance policy. It signifies that your insurer preliminarily agrees to cover the cost of the treatment subject to further verification.
2. Verification Process: The verification process starts with the hospital sending a pre-authorisation form to your insurance provider. This form contains valuable information, including:
- Policyholder's name and insurance policy number
- Diagnosis and suggested treatment
- Estimated cost of treatment
- Medical history and any other relevant documents.
Your insurer examines the submitted documents to confirm several important factors before giving initial approval. First, they check the policy's active status to make sure the coverage is valid and current. Next, they verify if the specified medical condition is included in the policy's terms and conditions. Additionally, they will assess whether the prescribed treatment is medically necessary and follows standard medical protocols.
Additionally, they ensure that the hospital where your treatment is planned is part of the insurance provider's cashless network hospital, as this is essential for accessing cashless facilities. This comprehensive verification process reduces any chance of discrepancies during final approval.
3. Conditional Approval
Once your insurer confirms all details, they provide an initial approval. This means that your insurer is open to reviewing your claim. Thus, it allows the hospital to move forward with the procedure without needing you to cover hospital costs upfront, aside from any non-covered charges, if applicable.
Is Initial Approval Final?
Many policyholders mistakenly believe that the initial approval allows the claim to be settled. However, initial approval is not a final authorisation. This is a provisional approval that has to be carefully reviewed during the final review process. Additional documentation after treatment completion includes:
- Medical reports and discharge summaries
- Policy terms and conditions
In this last stage, your insurance company can still turn down your claim if they find out any discrepancies, things not covered or find proof that your treatment does not meet what the policy asks for. For instance, in case the hospital overstates costs or in case the treatment falls outside your policy coverage, your insurer may reject your claim despite initial approval.
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