Claims Administration — TPA Role, Cashless Process, Reimbursement
Who handles claims under a group health policy, how cashless and reimbursement claims work, the time limits IRDAI sets for each, and where a member can complain.
Who handles the claim
Claims under a group policy are handled either by the insurer's own team or by a Third Party Administrator (TPA). A TPA is a company registered with IRDAI that services claims for insurers. Its work includes issuing member cards, handling cashless requests, processing claim papers, coordinating with network hospitals and running a helpline.
A TPA works on the insurer's behalf, and some tasks stay with the insurer. Setting the premium rate is part of the insurer's underwriting, not a TPA's function. IRDAI's Master Circular also says a TPA's remuneration may not be linked to the claim ratio or to reducing claims.
Cashless claims
In a cashless claim the insurer settles the admissible bill directly with the hospital, so the member does not have to pay that part first. For a cashless claim, the insurer and the TPA, not the member, collect the required documents from the hospital.
The Master Circular on Health Insurance Business (29 May 2024) sets two time limits. The insurer must decide a cashless request within one hour of receiving it; older material quotes two hours or longer. At discharge, final authorisation must be given within three hours of the hospital's request. If it takes longer, any extra amount the hospital charges because of the delay is borne by the insurer, not the patient.
Reimbursement claims
In a reimbursement claim the member pays the hospital first and claims afterwards, submitting the bills and documents to the insurer or its TPA. This is the usual route where cashless treatment was not arranged.
It is also the route when a cashless request is declined. A refusal of cashless is not a final refusal of the claim: the member can go ahead with treatment, pay the hospital and submit the claim for reimbursement, which the insurer then assesses under the policy terms. A reimbursement claim must be settled within 15 days of submission; older material quotes 30 days, or 45 where the claim was investigated. If payment is delayed, the insurer pays interest at the bank rate plus 2%.
Complaints
A complaint about delay or about a decision goes first to the insurer, which must resolve it within 14 days. An unresolved complaint can be raised on Bima Bharosa, IRDAI's grievance portal. The Insurance Ombudsman is open to members of group policies as well as individual policyholders, and can award up to ₹50 lakh.
Rules at a glance
Cashless declined, claim still open
Illustration: Lakshmi is admitted for a planned operation and the request for cashless treatment is declined. This does not end her claim. She goes ahead with the operation, pays the hospital, and submits the bills and documents for reimbursement. The insurer then assesses the claim under the policy terms. If she is unhappy with the outcome, she complains first to the insurer and can then raise the matter on Bima Bharosa.
Counting the time limits
- Assumptions of the example: the times, dates and the extra charge are made up to show how the limits are counted.
- Cashless request: the insurer receives the hospital's request at 10:00 am. One hour later is 11:00 am, so the decision is due by 11:00 am.
- Discharge: the hospital sends its discharge request at 2:00 pm. Three hours later is 5:00 pm, so final authorisation is due by 5:00 pm.
- Delay: the authorisation arrives at 7:00 pm, two hours late, and the hospital charges an extra ₹3,000 because of the delay. That ₹3,000 is borne by the insurer, not the patient.
- Reimbursement: another member submits a reimbursement claim on 3 March. 3 + 15 = 18, so settlement is due by 18 March. Payment after that carries interest at the bank rate plus 2%.
Result. Cashless decision by 11:00 am, discharge authorisation by 5:00 pm, the ₹3,000 delay charge on the insurer, and the reimbursement claim settled by 18 March.
Key points
- Group claims are handled by the insurer's own team or by a TPA, a company registered with IRDAI that services claims for insurers.
- A TPA does not set the premium; that is part of the insurer's underwriting.
- A cashless request must be decided within one hour, and final discharge authorisation given within three hours.
- Extra hospital charges caused by a delay in discharge authorisation fall on the insurer.
- A reimbursement claim must be settled within 15 days of submission, with interest at the bank rate plus 2% for delay.
Common misunderstandings
- A TPA is not the insurer: it services claims on the insurer's behalf and does not set premiums.
- A refusal of cashless is not a rejection of the claim: the member can pay and claim reimbursement.
- The one-hour and three-hour limits are not the same thing: one hour is for the first cashless request, three hours for final authorisation at discharge.
Questions people ask
Who pays if the hospital charges more because discharge authorisation was late?
The insurer. Any extra amount the hospital charges because authorisation took longer than three hours is borne by the insurer, not the patient.
Can a member of a group policy go to the Insurance Ombudsman?
Yes. The Ombudsman is open to members of group policies. The complaint must first have been made to the insurer.
What this lesson relies on
- IRDAI Master Circular on Health Insurance Business (29 May 2024) — cashless claims, group policies and TPAs
- IRDAI Master Circular on Protection of Policyholders' Interests (5 September 2024) — claim settlement timelines and grievances
- Insurance Ombudsman Rules, 2017 (as amended with effect from 10 November 2023)
This lesson was reviewed independently against these sources on 8 October 2026. Rules change: check the current regulation, scheme document or policy wording before relying on any figure. This is education, not advice.