Pre-authorisation in health insurance, what it means and what you sign

What pre-authorisation means

Pre-authorisation is the approval that makes a hospital stay cashless. The hospital asks your insurer, or the TPA working for it, to guarantee payment for the treatment. If the insurer agrees, it sends the hospital an authorisation letter with an approved amount. The insurer then pays the hospital directly, and you pay only what the policy does not cover.

IRDAI's Master Circular of 29 May 2024 says the insurer must decide on a cashless request within one hour of receiving it. It also says insurers must give pre-authorisation to the policyholder in digital form.

What the hospital desk sends

The request goes on IRDAI's standard format, "Request for Cashless Hospitalisation for Health Insurance Policy, Part C". The hospital and treating doctor fill in:

• The doctor's name, qualification and registration number.
• The illness, key findings, how long it has lasted and the provisional diagnosis with its ICD-10 code.
• The proposed line of treatment, and the name of the surgery if there is one.
• Accident details, including whether it was a road accident and whether police were told.
• Past history of long-term illnesses such as diabetes, heart disease or hypertension.
• Date of admission, expected days in hospital and in ICU, and the room type.
• Expected costs by head: room, nursing and diet per day, tests, ICU, theatre, professional fees, medicines, consumables and implants, and any package rate.

The 2020 procedure says the guarantee covers only the treatment named in this request. Read the room type and the daily room rent before you sign.

What you sign

You fill in your name, contact details, policy number, card ID and any other health policy you hold. Then you sign a declaration. On the standard form, you agree that:

• The hospital may send all original documents to the insurer or TPA, and you will sign the final bill and discharge summary before leaving.
• You will pay non-medical expenses, costs not related to this stay, and amounts above what the insurer authorised.
• You will settle the bill yourself if the insurer is not liable under the policy.
• If facts you gave turn out false, you lose the claim.
• The insurer or TPA may contact you by phone or email about the claim.

Planned admission

• 🗓️Planned admissionFor a planned stay, the request can go in before you are admitted.
• 🚑Emergency admissionIn an emergency, treatment comes first.
• ➕EnhancementIf the bill grows past the approved amount, the hospital sends an enhancement request on the same form while you are still admitted.

For a planned stay, the request can go in before you are admitted. IRDAI's 2020 cashless admission procedure for hospitals asked for it to reach the insurer or TPA 7 days before the expected date, with reasons if later. The 2020 standard policy wording asks for notice at least 48 hours before a planned admission. Your own policy sets the notice period.

The authorisation letter states the amount guaranteed, the room class you are eligible for, and the dates it is valid for. Under the 2020 procedure it was valid for 15 days from issue, and it is conditional on the facts sent. If the line of treatment changes, the hospital must get a fresh approval on the same form.

Emergency admission

In an emergency, treatment comes first. The 2020 procedure says life-saving, limb-saving and sight-saving care cannot be withheld or delayed while the hospital waits for approval. The hospital may take a token deposit, and should refund it once approval comes, keeping a token amount for items the policy does not cover. The 2020 standard wording asks for notice within 24 hours of an emergency admission.

Enhancement

If the bill grows past the approved amount, the hospital sends an enhancement request on the same form while you are still admitted. No enhancement is possible after discharge. The 2024 circular's one-hour rule is written for "the request for cashless authorization" and does not name enhancement requests separately. The older 2020 procedure gave insurers 24 hours to decide one.

At discharge, the hospital sends a final request with the discharge summary and bill. The insurer must grant final authorisation within 3 hours, and pays any extra hospital charge caused by a longer delay.

If pre-authorisation is refused

If cashless is refused, the hospital can still treat you. You can pay and file a reimbursement claim. The insurer must explain any rejection in writing with reference to the policy terms.

Have a hospital stay coming up? Send your policy on WhatsApp and a person checks it for you.