A cashless policy makes the policy holder eligible to avail himself of medical treatment at any of the network hospitals of the insurer, without having to shell out cash at the time of treatment. Insurance companies have a panel of authorised Third Party Administrators (TPAs) who offer services across various cities.
TPAs are the main contacts for the settlement of claims. In case of hospitalisation, the TPA settles the hospital dues by issuing a letter to the hospital guaranteeing payment of dues for the treatment availed. Once the policy holder is discharged from hospital, he forwards the relevant documents along with the bills to the TPA. There are two ways in which this is done.
In the first case, the TPA examines the claim and sends it along with the relevant documents to the insurer. The insurer, in turn, makes the required payment to the TPA who then pays the hospital. In the second case, the TPA settles the hospital dues and then claims reimbursement from the insurer after necessary processing.