According to the master circular, insurers have been directed to grant the final authorisation within three hours of receiving the receipt of the discharge request from the hospital.
This master circular, which has been made replacing 55 earlier circulars, is aimed at empowering policyholders and strengthening inclusive health insurance.
The IRDAI circular dated May 29 consolidates information on policyholder entitlements in a health insurance policy for easy reference, and also highlights measures to provide policyholders with a smoother, faster, and hassle-free claims experience and ensure improved service standards across the health insurance sector.
"In no case, the policyholder shall be made to wait to be discharged from the hospital," the IRDAI master circular read.
"If there is any delay beyond three hours, the additional amount if any charged by the hospital shall be borne by the insurer from shareholder’s fund," it added.
The IRDAI said that in the event of the death of the policyholder during the treatment, the insurer will immediately process the request for claim settlement, and get the mortal remains (dead body) released from the hospital immediately.
The insurance regulator said that the insurers should strive to achieve 100 percent cashless claim settlement in a time-bound manner.
"In emergency cases, the insurer should decide on the request for cashless authorisation immediately, within one hour of receiving the request," the circular read.
The IRDAI also asked insurers to put necessary producers in place immediately by July 31 to achieve this goal.
"The insurers may arrange for dedicated help desks in physical mode at the hospital to deal with and assist with the cashless requests," as per the circular.