Differences Between Claim Rejected and Claim Repudiated: Also Know How To Avoid Claim Rejection

The terms 'claim repudiated' and 'claim rejected' may seem alike, but they differ significantly. This article explains their main differences and explores the specific reasons behind claim rejection.

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. If there are errors such as missing documents, incorrect policy numbers, or inaccurate patient details, your insurer may reject the claim. You can resolve a rejection by submitting the correct paperwork or accurate information.

Examples of Claim Rejection

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

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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. There can be multiple reasons behind it; it can be non-disclosure of material facts or even fraud. Claim repudiation immediately stops the process of payment clearing because of suspected irregularities or claims of exclusions.

Examples of Claim Repudiation

• The insured had raised claim multiple times
• Hidden pre-existing illnesses discovered
• The insured submitted fake medical bills
• Manipulated diagnosis reports were submitted

Difference Between Health Claim Rejection And Repudiation

Many policyholders often confuse the terms claim rejected and claim repudiated. Here are the major differences:

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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, it will lead to claim rejection a second time. Raising duplicate claims also appears as an attempt to bypass the claim verification process, which rejects the claim.

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 raised a health claim which covers a chronic condition, but instead, you have submitted the diagnosis report for a limb injury. Submitting wrong bills and wrong hospital expenses may lead straight 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.

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, 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?

• 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

Insurers usually reject the claim due to improper documentation or if the insured has missed policy renewals multiple times. This is different from a claim repudiated, as an insurer repudiates a claim after reviewing its criteria to meet policy guidelines. 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 after a thorough inquiry, and only when they become aware that any fraudulent or improper documentation has been submitted.

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