Claim Rejection & Repudiation in Health Insurance

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What is Claim Rejection and Claim Repudiation in Health Insurance?

Submitting a health insurance claim does not mean it will be paid, as claims can be rejected or repudiated. Although both terms mean a claim has been denied, the reasons and implications differ. A claim rejection happens due to incomplete documentation, whereas claim repudiation occurs when the insurer denies the claim for reasons based on the terms and exclusions of the policy.

Understanding the difference is helpful for every policyholder to minimise unexpected denials, ensure the claims process is smooth, and protect their finances during a medical emergency. Knowing the reasons saves you time without unnecessary stress.

Claim Rejection in Health Insurance
Claim Repudiation in Health Insurance
Claim Rejection vs Claim Repudiation in Health Insurance
Why Do Health Insurance Claims Get Rejected?
Reasons for Health Insurance Claim Repudiations
What to do if Your Health Insurance Claim is Rejected?
Tips to Avoid Health Claim Rejection or Repudiation
Frequently Asked Questions

What is Claim Rejection in Health Insurance?

A health insurance claim is rejected when the insurance company denies the claim for any missing information or documents submitted. Common reasons for the rejection are that the signature is missing or that specific steps were not followed. Understanding these reasons will help policyholders promptly and correctly submit their claims and increase the chances that their claims will be approved.

What is Claim Repudiation in Health Insurance?

Claim repudiation occurs when an insurer denies a claim after reviewing it, usually because the claim violates policy terms or conditions. Common reasons include claims for pre-existing conditions not covered, treatment for excluded illnesses, or nondisclosure of relevant medical information.

Unlike claim rejection, repudiation happens after the insurer evaluates the claim. In that case, policyholders should check their policy, disclose all health-related information, and understand coverage limits and exclusions.

Difference Between Claim Rejection and Claim Repudiation in Health Insurance

Here are the key differences between claim rejection and claim repudiation:

Aspect	Claim Rejection	Claim Repudiation
Meaning	Claim rejection happens due to missing information or documentation issues.	Claim repudiation happens due to policy term violations, exclusions, or fraud.
Stage	This happens at the beginning of claim processing, often before detailed review.	This happens after the full review of the claim and a complete check.
Reason	Procedural issues like incomplete forms, missing documents, or policy lapse.	Policy-based issues like non-disclosure of pre-existing conditions, exclusions, or fraud.
Claim Review	Preliminary check for completeness and fundamental validity.	Detailed investigation including policy terms, medical facts, and supporting evidence.
Scope for Resubmission	Yes, it can be corrected and resubmitted.	Rare; usually rejected unless substantial evidence is provided on appeal.
Example	The claim was denied due to missing hospital bills or an incorrect policy number.	Claim denied for not disclosing pre-existing conditions, treatment of excluded diseases, or fraudulent claims.

Why Do Health Insurance Claims Get Rejected?

The reasons for claim rejection in health insurance are mentioned below:

What are the Reasons for Health Insurance Claim Repudiations?

The important reasons for claim repudiations in health insurance are mentioned below:

Exclusions in Your Health Insurance Policy

Health insurance companies have exclusions in their policies that list treatments or conditions not covered by your insurance. Cosmetic surgery is one common claim that could be denied, as well as an injury sustained while under the influence of substances.

If You Don’t Disclose Your Prior Illness

If you purchase a policy and do not disclose a pre-existing condition like diabetes, hypertension, or asthma, the insurer can deny a claim for treatment. It's better to be honest with your medical history to avoid claims denials.

If Your Waiting Period is Not Over

Some policies impose a waiting period for conditions, such as maternity or pre-existing conditions. If you file a claim before the waiting period ends, the insurer may repudiate the claim.

If Your Treatment is Not Covered by Your Health Insurance Policy

If your treatment is not covered under your policy or doesn't go to a non-network hospital, an insurer may deny or repudiate your claim.

If Your Out-of-Pocket Costs for Treatment Exceed Sum Insured

If your medical bills go over the policy's sum insured, the insurer will pay to the policy limit, and you're responsible for any amount above that.

If You Have Any False or Misleading Claim Documents

If any false documents or medical bills related to the claim are submitted, then they will be denied. Any act of fraud may result in the termination of the policy or the consideration of legal action unless the evidence is submitted.

What to do if Your Health Insurance Claim is Rejected?

The rejection of a health insurance claim is not the full stop. All you have to do is ensure that you use the steps provided to know why it was rejected, and in case an error is made, you can appeal. Consider addressing the following:

Study the Denial Letter: Read through the denial letter carefully, which states whether the claim denial was based on missing documents, exclusion/ policy, inaccurate details, or late claim submission. Simply recognising the reason is the first step.
Review Your Health Insurance Policy Conditions: Read your policy and match the reason given by the insurer to the terms of the cover. Sometimes, insurers deny claims simply because it is not covered or because waiting periods still exist.
Contact Your Insurer: Contact the insurer's customer support or claims team. Explain the claim-related issues properly and provide any clarity from your side.
Collect Complete Documentation: Get copies of all documentation, including hospital bills, prescriptions, diagnostic reports, discharge summaries, or other items that prove your claim.
Appeal for Your Claim Denial: You must appeal within a specified period (usually 30-60 days) with a document showing why you felt the denial was unjustified. Include every supporting documentation and explanation in written form.
Escalate Your Appeal to IRDAI: If the insurer continues to deny your claim, you may escalate to the Insurance Ombudsman or the Insurance Regulatory and Development Authority of India (IRDAI).

What are the Tips to Avoid Health Claim Rejection or repudiation?

Here are some specific prevention tips to help you get smooth and transparent claims settlement in crucial times:

Provide Full Information: You must provide honest and complete information regarding your health condition, way of life, and existing health conditions while purchasing a policy. Failing to disclose information increases your chances of having your claim denied.
Read The Policy Document: Before committing to the policy, read the inclusions, exclusions, waiting periods, and limits in detail. Clarity here can help you avoid many surprises when claiming your policy.
Pay Your Premiums On Time: Ensure your policy does not lapse. Setting reminders for the due dates or enrolling in auto-pay can help you avoid a lapse. A lapsed policy can provide no coverage in an emergency.
Select Adequate Coverage: You should select a policy sum insured that reflects the medical costs in your city. Under-insurance may result in out-of-pocket expenses to cover treatment.
Stay Within the Network: Selecting facilities partnered with your insurer for cashless treatment will avoid the claim reimbursement problems and result in quicker claim settlements.
Notify Your Insurer As Soon As Possible: If you will be going in for treatment or have been admitted due to an emergency, inform your insurer as soon as your circumstances allow. Giving your insurer timely notice will help you avoid all the last-minute complications.
Do Not Delay in Submitting Your Claim: Submit your claims promptly. Late submissions may result in unnecessary rejections even when you have a valid and worthy reason.

FAQs about Claim Rejection & Repudiation in Health Insurance

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What is claim rejection in health insurance?

Claim rejection occurs when your insurer refuses to process your claim due to incomplete documentation, incorrect information, or missed deadlines. In a claim rejection, nothing about the claim is even evaluated.

What is claim repudiation in health insurance?

Claim repudiation occurs when the insurer has done its due diligence and has reviewed your claim but denies payment because the treatment and/or expense does not fall under the terms of your policy. Claim repudiation differs from rejection in that the claim has been reviewed and considered invalid.

How is claim rejection different from repudiation?

Claim rejection occurs due to procedural or documentation mistakes, while repudiation occurs when the claim is outside the policy coverage.

Will a late premium payment lead to a claim being rejected?

Yes. If you miss or delay paying your premium and your policy lapses, the insurer will deny a claim during that inactive period because the policy is no longer valid.

Why do insurers repudiate health insurance claims?

Repudiation usually happens when treatment is not covered, the waiting period has not been completed, or there has been nondisclosure of pre-existing conditions.

Will incomplete documentation lead to a claim being rejected?

Yes. Missing hospital bills, unsigned forms, incorrect details, etc, are common reasons for rejection. Even though you can make a claim, the insurer will not process it if you do not submit the relevant documentation correctly.

To what extent does the non-disclosure of your medical history impact repudiation?

Suppose you do not disclose primary health conditions when buying insurance. In that case, the insurer has the right to repudiate a claim made regarding those health conditions in the future.

Is it possible to appeal a rejected claim?

Yes. If your claim is denied, you can appeal it by submitting any missing documents or correcting any mistakes. If your issue remains unresolved, contact the insurer's grievance team, the IRDAI, or the Insurance Ombudsman.

Can a repudiation of a claim be disputed?

Yes. Suppose you believe the insurer has disputed your claim wrongly, for example, incorrectly applying exclusions or misreading the terms. In that case, you can dispute the repudiation, potentially through legal avenues or an insurance ombudsman.

Does wording matter for the repudiation of a claim?

Yes. All policies have their inclusions, exclusions and conditions in detail. When you have a treatment not on the coverage list, it is repudiated. Careful reading of policy wording can save this type of surprise.

What if the hospital is not in the insurer's network?

The cashless claims may be refused if you have gone out of network. However, you can apply for reimbursement. You may be repudiated based on the treatment, and not the hospital, if it was not covered, regardless of the hospital.

Can a refusal of pre-authorisation be considered a repudiation of the claim?

Yes. If your insurer refuses, due to incorrectly filled or missing details, for cashless pre-authorisation at the facility, it is considered a refusal. However, submitting for reimbursement on a claim is possible if you have paid.

How can one avoid repudiation and refusal of claim?

You must disclose complete health information on the policy, keep to the renewal date, keep to the terms of the reading, choose included treatments, and be prepared for treatment with documentation.

Written By

Srishti Singh

Reviewed by

Vivek Chaturvedi