What is The Difference Between Claim Rejected and Claim Repudiated? Also Know How To Avoid Claim Rejection

When you are purchasing a new group health insurance for your team, you have to know the difference between claim rejected and claim repudiated in insurance. Let’s understand their main difference.

What Is Claim Rejection?

Claim rejection happens when your insurer refuses to process the claim for some specific reason. Let's understand when it happens.

When Does it Happen?

Claim rejection occurs before your insurer reviews your claim. It can happen when there are errors such as:

• Missing documents
• Incorrect policy numbers
• Inaccurate patient details

Examples of Claim Rejection

• The policyholder has filed their reimbursement claim after the policy had expired
• The policyholder has raised a cashless hospitalisation request without preauthorization
• The medical diagnosis report of the policyholder does not match the list of coverages

Also read the meaning and coverage of critical illness in insurance.

What Does Claim Repudiated Mean?

A claim repudiated meaning is that the claim has been processed, yet not cleared due to substantive reasons. In simple words, the insurer refuses to pay the claim for violation or not meeting the terms and conditions of the policy.

When Does it Happen?

Claim repudiation is a fraud control system, as it happens after the insurer has processed the claim, yet refused to settle it. The insurer can repudiate a claim because of multiple reasons such as:

• Non-disclosure of material facts
• Suspicion of fraud claim
• No insurable interest claim
• The claim is an exclusion according to policy terms
• Violation of policy coverage
• Contract illegality

Examples of Claim Repudiation

• The policyholder had raised claim multiple times
• The insurer discovered claims for hidden pre-existing illnesses which was not disclosed during policy purchase
• The policyholder submitted fake medical bills
• Manipulated diagnosis reports were submitted

Difference Between Health Claim Rejection And Repudiation

Many policyholders often don’t understand the main difference between claim rejected and claim repudiated in insurance. Check this below:

Also read what is moratorium period in health insurance.

What Are The Main Health Insurance Claim Rejection Reasons?

Let’s now understand some of the most common reasons:

Incomplete Documents Submitted

The most frequent cause is missing documents. For example, many insurers reject the claims before approval because of absent prescriptions or incomplete submission of health documents.

Duplicate Claims Raised

In case you have raised a duplicate claim because your first claim was not passed, your insurer can reject your claim a second time. Raising duplicate claims to bypass the claim verification process also leads to instant claim rejection.

Missing Renewal Date

If you repeatedly miss the renewal date or pay too late, your claim can get rejected on the grounds of lapsed payment. Late filing often triggers rejection from the insurer's side. Cashless claims can be rejected if prior authorization is not sought.

Errors in Claim Filing

One of the major health insurance claim rejection reasons is errors in the submission of medical bills. Imagine that you have submitted the diagnosis report for a limb injury for a health claim of chronic liver condition. Submitting wrong bills and wrong hospital expenses may also lead to rejection.

Non-Compliance with Claim Process

Every insurer maintains certain protocols. If you skip the required pre-approvals or get treated in a non-network hospital, it can critically impact your insurance procedure.

How To Check if My Insurance Claim Was Rejected or Repudiated Online?

If your claim has been rejected or repudiated, you will be notified by your insurer through a SMS or an email. Apart from that, there are multiple ways to check if any team member’s insurance or your insurance has been rejected or repudiated.

Method 1 - Check With Your Insurer

• Login to your insurer website
• You will find a section for “Claims” or “File Claim”
• Enter policy number and claim reference number
• Click on “Check Status” or “Check Claims Status”

Method B - Call/Mail Your Insurer

In case you don’t find any direct online checking system, you will need to connect with your insurer over a call or mail them. These days most insurers like Covrzy offer a dedicated WhatsApp number to send a text message and instantly connect with their customer support. Many insurers also have a chatbot to connect with customer support, you can ask the chatbot to connect you with a support executive too. Ask them about the status of your claim, you will be notified with a mail or with the call if your claim has been rejected or repudiated. At Covrzy, you get to track your claim status live by connecting with a human customer support member in minutes.

Main Steps To Appeal a Rejected Vs Repudiated Health Insurance Claim

If your claim has been rejected or repudiated without a justifying reason, you can take these steps.

Step 1 - Visit IRDAI Bima Bharosa Online

• Visit the official website of IRDAI authorized Bima Bharosa.
• Click on “Register Complaint” option under the New User option.

Step 2 - Enter Complaint Details

You will be directed to a different page where you have to fill in these details:

• Name of your business
• Address of your business
• Insurance company name and policy name
• Policy number, claim number, certificate number
• Complaint description
• Policy copy and claim form attached as pdf

Step 3 - Wait for 14 Days to Check Complaint Status

You have to wait for 14 days to receive an update from the Bima Bharosa portal. Any updates about your complaint will be shared with you via a SMS or an email to your registered email address.

As a citizen of India, you should know the consumer rights when a health insurance claim is repudiated in India. IRDAI protects the rights of businesses and consumers in case the founder or business owners feels their claim has been wrongly repudiated.

What Are The Main Reasons For Claim Repudiation?

Before filing your next claim, you must know why your claim is repudiated. Some of the real-life reasons are:

Non-Disclosure of Pre-Existing Disease

If you do not disclose your pre-existing disease condition at the time of purchasing the proposal, there is a high chance that your claim will be repudiated. Insurers expect complete disclosure of material facts, as that impacts their underwriting process.

Committing Fraud or Misrepresentation

If you submit fake hospital bills or submit falsified medical expenses, your insurer will likely repudiate the claim. For example, altering invoices or doctor prescriptions using Generative AI, inflating medical costs can lead to instant repudiation. Remember that your insurer will always do a background check with the network hospital to identify fraud.

Policy Exclusions and Waiting Periods

Certain treatments are excluded from your coverage or subject to waiting periods. If you submit your claim within the exclusion criteria or within the waiting period, the insurer can repudiate. You cannot bypass waiting periods anyhow, and have to respect the exclusion criteria too.

Claims Outside the Scope of Coverage

Among multiple term insurance claim rejection reasons is that your insurance policy does not cover surgeries or therapies. For example, if your health policy does not cover experimental therapies or cosmetic procedures, your insurer may repudiate the claim.

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How To Avoid Claim Rejection?

Now that we have understood claim repudiated meaning and reason for claim repudiation, let’s understand how to avoid it.

Submit Accurate Documentation

Attach all the authentic medical bills as well as original prescriptions. You can also consult the insurer to know the required list of documents. Fill every field carefully and sign in the required space. Always keep a scanned electronic copy of the same with yourself.

Follow Claim Deadlines

Always file reimbursement claims within the insurer’s stated timeline. Lapsing claims often result in filing the claim after cashless planned procedures, and getting pre-authorized in advance.

Ensure The Policy is Active

Make sure that your current policy is active before raising a claim. In case your policy has expired and you did not renew it, you can face a straight rejection. You can set an automatic reminder for premium payments or calendar reminders.

Submit Through Insurer Channel

Submit claims through the insurer’s portal or by the network hospital’s portals. Follow the hospital’s discharge checklist for cashless claims. You can also follow up with hospital staff to inquire about the required documents.

Matches With Coverage Terms and Waiting Period

Before submitting your claim, always check if your claim lies within the coverage terms. Also, check if you are not applying during the waiting period. After purchasing your health policy, you will usually encounter a waiting period of 1 - 3 years, during which you cannot raise a claim.

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What To Do If Your Claim Is Repudiated or Rejected?

IRDAI offers every citizen their consumer rights when a health insurance claim is repudiated in India. Here are some easy steps which you can take:

• Immediately connect with your insurer. Ask them why the claim has been rejected or repudiated, and note all the reasons stated that have led to rejection.
• In case your claim is rejected and not repudiated, check if you have raised the claim within the policy coverage. Also, check if you have raised the claim during the waiting period.
• Read again the terms and conditions of the policy, and understand if you have correctly submitted all the required documents.
• Check if you have paid the latest premium. In case you have missed out on the premium, ask your insurer for a grace period.
• In case you think that you have rightfully raised the claim, and it is still rejected, then you can raise a complaint with the IRDAI Ombudsman department.

Also read what does cooling-off period means in insurance.

How To Avoid Claim Repudiation?

You can completely avoid getting claim repudiated if you follow these specific steps:

Disclose Your Current Health Condition

You need to disclose your prior surgeries, lifestyle conditions, and attach current health condition reports. This can include your latest scan reports, medical prescriptions, doctors' prescriptions.

Understand Policy Exclusions

Most of the policyholders face rejection in their health claims because they apply for excluded diseases. Before signing up for your health policy, always check the exact policy coverages and exclusions.

Avoid Waiting Periods

A common mistake many individuals make while raising a claim is to claim during the waiting period. Health insurance policies that cover pre-existing diseases come with a waiting period. You need to wait during this phase to avoid your claim getting denied.

Follow the Principle of Utmost Good Faith

The principle of utmost good faith stands for honest disclosure of information between the insurer and the insured. Always provide material facts, and current medical reports. Insurance works because of trust and honesty; respecting that will help you to avoid claim denials.

What Is The Supreme Court Judgement On Insurance Claim Rejection?

The Supreme Court of India has clarified that, as per Section 45, Insurance Act, 1938, the insurer cannot question the life insurance policy after 3 years have already passed. Moreover, the Court also stated that mere non-disclosure of irrelevant facts should not automatically justify repudiation. Unless there is a misstatement or any material disclosure is not provided by the policyholder, the insurer cannot repudiate claims.

Conclusion

Claim rejection happens when the policyholder has not submitted proper policy details or has claimed insurance without renewing the policy. This is different from a claim repudiated, where an insurer repudiates a claim if the policyholder submits fake hospital bills or claims during the waiting period. You can avoid your policy getting rejected or repudiated by following simple steps, such as disclosing material facts and always renewing on time. Remember that insurers repudiate and reject a claim only after a thorough inquiry, or when they suspect any fraudulent claim.