Cashless

Cashless hospitalisation is a claim-settlement mode where the insurer pays the hospital directly for your treatment and you do not have to raise the money upfront. The mechanism runs through a Third Party Administrator (TPA) — a separate company, appointed by your insurer, which the hospital communicates with during your admission. For cashless to work, the hospital must be in the insurer's network.

At admission, the hospital sends a pre-authorisation form with the provisional diagnosis, line of treatment, and estimated cost to the TPA, which replies (typically within four to six hours, often quicker for planned surgeries) with an approval amount. At discharge, the TPA clears the final bill minus any non-admissible charges, deductibles, or co-pay that you owe. In Indian practice, large metros have deep network coverage across top hospitals, but smaller towns can have patchy network access — it is worth checking the network list at a hospital within 30 km of your home before you buy.

Worked example: a ₹4. 2 lakh planned knee replacement in a network hospital on a ₹10 lakh family floater with no co-pay and no sub-limits typically settles as follows — you deposit ₹10,000 to ₹25,000 as an initial refundable deposit, present the policy and health card, the TPA pre-authorises the procedure, and at discharge you pay only the non-admissible items such as an attendant bed, deluxe room upgrade, or consumables not covered. A common misconception is that 'cashless means zero out of pocket'.

It does not. Consumables (gloves, surgical kits), non-medical items, administrative charges, and any amount above your sub-limits are always the patient's responsibility. Another common misconception is that if a hospital is in the network, cashless is guaranteed.

It is not — the TPA can deny pre-authorisation for lack of medical justification or a policy exclusion, in which case you pay and claim reimbursement later. IRDAI's 'Cashless Everywhere' initiative is a step towards broadening access, but it is not yet universal. Related: reimbursement, TPA, pre-authorisation.