COVID-19 | Delhi High Court directs insurers to settle claims within 30-60 minutes

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The Delhi High Court has said insurance companies should approve the cashless treatment with 30 to 60 minutes, as delay in discharging patients is leading to delay in admitting needy patients. The court said insurance companies cannot take 6-7 hours for approving bills of COVID-19 patients as delaying discharge make those in need of beds wait longer.

Justice Prathiba M Singh took up individual pleas relating to admission to hospitals for Covid-19 treatment. While hearing the plea she also said that contempt action would be taken against an insurance company or a third-party administrator (TPA) if the court comes to know that processing of insurance claims is taking 6-7 hours.

As of April 20, 2021, over 9 lakh covid related claims have been settled by insurance companies for Rs 8,642 crore.

Last year in April 2020, the Insurance Regulatory and Development Authority (IRDAI) issued a circular stating that a decision on authorization and final discharge for cashless treatment shall be communicated to the hospital within two hours. Now, with the Delhi Court asking insurers to clear cashless settlement within 30-60 minutes, IRDAI might need to intervene again, as insurance companies are taking much longer to settle the cashless claims.

The circular issued last year stated, “In light of prevailing conditions owing to COVID-19 as also taking into consideration the need for alleviating the pressure on the healthcare infrastructure all the insurers shall decide health insurance claims expeditiously.

In order to ensure all health insurance claims are responded to quickly, insurers are directed to comply with the following timelines:

a. Decision on authorization for cashless treatment shall be communicated to the network provider (hospital) within two hours from the time of receipt of authorization request and the last necessary requirement from the hospital either to the insurer or to the TPA whichever is earlier.

b. Decision on final discharge shall be communicated to the network provider within two hours from the time of receipt of the final bill and last necessary requirement from the hospital either to the insurer or to the TPA whichever is earlier.”

Earlier this month, in the wake of growing complaints, Finance Minister Nirmala Sitharaman also asked IRDAI to direct companies to prioritise authorisations and settlement of Covid cases.