What Is Cashless Treatment and How Does It Work?

Written by : Knowledge Centre Team

2025-08-02

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Good health makes it easier to enjoy life and stay focused on your goals. Still, in everyone's life, there is always a possibility of falling ill or facing a medical emergency. You or a family member might need sustained medical attention as part of managing a long-term condition. Medical treatment in India can be very expensive, and high medical bills can throw you off track in your financial journey.

Fortunately, you can have health insurance. It ensures your family is protected from the financial burden of treatment. Health insurance acts as a cover for medical expenses so you and your loved ones can continue to enjoy life without financial stress. Many health insurance plans also offer cashless treatment, meaning you do not have to pay upfront at the hospital, giving you peace of mind when you need it most.

Key Takeaways

Cashless treatment lets you get medical care without paying upfront; your insurer settles bills directly with network hospitals
Always check your insurer’s list of network hospitals before planned treatment or in an emergency
Keep all necessary documents, such as insurance card, ID proof, pre-authorisation form, and medical reports, handy
If cashless treatment is unavailable, you can claim expenses for reimbursement later
Combine health insurance with other covers, like critical illness and term insurance for complete family protection

What is Cashless Treatment: Definition

When someone in the family is hospitalised, you want to be with them. Nobody wants to wait in the ATM queue to withdraw money to get their loved ones admitted. However, at times when the amount required is high, you may find yourself calling a friend or a relative for cash for hospitalisation.

No would want to be in this situation, especially during a medical emergency. Cashless medical treatment solves this problem. When you opt for cashless treatment, the insurance company settles the bills directly with the hospital, so you don't have to pay upfront to admit the patient or for their treatment.

However, the entire treatment may still not be fully cashless as there is a limit to the maximum sum assured under a comprehensive health insurance policy.

Cashless Everywhere Update

India’s health insurers have also introduced the “Cashless Everywhere” initiative, which aims to extend cashless hospitalisation beyond an insurer’s network hospitals to eligible non-network hospitals as well, subject to the insurer’s operating guidelines and the claim being admissible under the policy. This means policyholders may be able to request cashless treatment at a wider set of hospitals, rather than being limited only to network hospitals.

Key points to note:

Cashless approval is still subject to policy terms and admissibility (coverage, limits, exclusions, waiting periods, etc.)
You generally need to inform the insurer within prescribed timelines (for planned admissions and emergencies) as per the operating guidelines
If cashless cannot be arranged, reimbursement remains the fallback option

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Can You Avail Cashless Treatment Anywhere?

Cashless treatment is available only at network hospitals, and (under ‘Cashless Everywhere’) may also be available at non-network hospitals subject to the insurer’s operating guidelines and policy terms. Insurance companies tie up with different hospitals after analysing their medical services. You can only avail of cashless treatment at the network hospitals your insurance company or you may be able to avail it at non-network hospitals too under the latest ‘Cashless Everywhere.’

Cashless treatment can be accessed in the following two ways:

Planned Hospitalisation: If you or a family member needs treatment that requires hospitalisation, you should check the list of network hospitals in your city. You can refer to your policy document or check with your insurance company to find the list. If using ‘Cashless Everywhere’ at a non-network hospital, inform the insurer within 48 hours of admission (as per the guidelines cited).
Obtain the pre-authorisation form from the hospital's insurance desk and complete the required details. Once completed, submit the form to the hospital's insurance desk for review. Once the request is approved, the insurer will disburse the treatment amount directly to the hospital.
Emergency Hospitalisation: In a medical emergency, you should carry your health insurance card to the network hospital for cashless treatment. It should include your policy number and coverage type. To expedite the process, complete the authorisation form provided by the hospital.
Even if your cashless treatment request is approved, it may not cover all the costs like hospital admission fees, service charges, and ambulance charges, which are generally not included in the coverage.

Documents Required for Cashless Treatment

To make the most of your cashless treatment benefit, it’s important to keep all necessary documents ready and complete. Missing or incomplete paperwork can lead to unnecessary delays or even claim rejection during an emergency.

Here’s a list of documents you should always have at hand to ensure a smooth cashless hospitalisation process:

Health Insurance Card: Always carry your original health insurance card/e-card details issued by your insurer. This card has your policy number, and coverage details, and acts as proof of your eligibility for cashless treatment.
Photo Identity Proof: A valid government-issued photo ID, such as an Aadhaar card, driving licence, or passport, is usually required by the hospital and the insurer to verify your identity.
Pre-Authorisation Form: For planned hospitalisation, you need to fill in and submit a pre-authorisation form at the hospital’s insurance desk. This form must be signed by you or your representative, as applicable) and completed/signed by the hospital/treating doctor.
Doctor’s Prescription And Medical Reports: Carry the doctor’s prescription advising hospitalisation, along with any test reports, diagnostic results, or medical history related to the current treatment.
Policy Document Copy: It’s good practice to keep a copy of your health insurance policy document. This helps when the insurer or hospital needs to cross-check details such as inclusions, exclusions, or the sum insured.
Any Other Relevant Documents: Depending on your insurer’s terms, you may also need discharge summaries from previous hospital visits, referral letters, or additional medical certificates. Always check with your insurance company in advance to avoid last-minute confusion.

Does Your Health Insurance Work Outside India?

Most health insurance plans in India are designed to cover your medical expenses within India. This means that if you use healthcare services such as hospitalisation or OPD treatment while travelling abroad, your health insurance policy will not cover them. In general, your health insurance does not work outside India.

However, some health insurance plans offer worldwide coverage. If your health policy inludes global coverage, your insurance company will pay for medical bills incurred while travelling abroad (given all policy terms and conditions are met).

Learn:- why your health insurance cover may not be sufficient.

What to do When Cashless Treatment is not Available?

Cashless treatment can make an already difficult journey situation easier for you. However, if for any reason the network hospital is not providing cashless treatment, there are two options available to you:

You can go to another network hospital to access the cashless facility. This will ensure you don't have to pay out of your own pocket.
With the ‘Cashless Everywhere’ initiative, you may also be able to request cashless treatment even at a non-network hospital, subject to your insurer’s operating guidelines and the claim being admissible as per policy terms (for planned admissions, the insurer may require prior intimation; for emergencies, intimation timelines may apply).
In an emergency, the above option may not be possible. In such cases, you can settle the hospital bills yourself and claim the amount later from the insurance company.

Other Insurance Plans to Consider

You need to protect your loved ones from all angles. Hence, it is essential to have other insurance plans for all-around protection. If you are the only breadwinner in your family, the family will go through tough times if you are diagnosed with a critical illness. Hence, opt for an insurance plan that offers you coverage against critical illnesses.

Under cancer and heart cover, if you are diagnosed with any of these conditions, all your future premiums are waived. Also, you get additional monthly income to take care of your family (if you opt for this feature).
Health and term insurance plans are among the first investments anyone should make, as they act as long-term shields to protect you financially. Also, you should have the appropriate sum assured for your insurance plan.
For term insurance, the sum assured should be 10 to 15 times your annual salary. So, if your annual salary is ₹ 8 lakh, you should opt for a plan with coverage between ₹ 80 lakhs and ₹ 1.2 crore.
For health insurance, the rule of thumb is to have coverage of about 50% of your annual income. If your yearly income is ₹ 12 lakh, your health insurance policy should provide coverage of at least ₹ 6 lakh.
With the rising cost of treatment and medicines, and uncertainties of life, insurance is not an option. You should buy the right insurance plan now and secure the future of your loved ones.

Conclusion

Cashless treatment is a key feature of modern health insurance that can ease the stress of hospitalisation by eliminating the need for upfront payments for approved/admissible expenses. By selecting a policy with a broad network of hospitals (and understanding options like ‘Cashless Everywhere’, where applicable), keeping your documents organised, and understanding the claims process, you can ensure timely and hassle-free access to medical care. For complete protection, consider combining your health plan with other essential coverage, such as critical illness and term insurance.

Glossary

Network Hospital: It is a medical facility partnered with an insurer, enabling cashless treatment for covered policyholders
Insurance Card: Physical/e-card showing policy details used for identification and cashless/reimbursement claims
Cashless Everywhere: Facility enabling cashless at non-network hospitals too, subject to insurer guidelines and admissibility
Pre-Authorisation Form: Form submitted before/at admission for cashless approval of admissible treatment expenses
OPD Treatment: Outpatient care without hospital admission (doctor consults, tests, medicines as covered)

FAQs

A cashless facility in medical insurance lets the insurer settle eligible treatment bills directly at a network hospital, once pre-authorisation is approved for planned care or within 24-48 hours for emergencies. You share ID, policy details and medical reports for verification, and pay only non-medical or non-covered charges, avoiding large upfront payments.

If cashless treatment is not authorised, you pay the hospital bill upfront and later file a reimbursement claim with the insurer using original bills, medical reports and prescriptions. A cashless denial is not a coverage denial. Eligible expenses can still be paid, provided the claim follows the reimbursement process with complete documentation

Cashless treatment typically settles major hospital costs, surgery, medicines and room charges, at network hospitals. It generally does not include non-medical fees, pre-existing conditions under active waiting periods, or excluded procedures such as cosmetic care and some alternative therapies. New Cashless Everywhere options may extend cashless access to non-network hospitals, with prior insurer approval and policy exclusions still applicable.

Most cashless hospitalisation policies cover pre- and post-hospitalisation expenses, including consultations, diagnostics and prescribed medicines. These costs are commonly settled through reimbursement after the primary hospital claim is approved. Coverage applies only within defined policy timeframes, such as 30 days before and 60–90 days after discharge, and remains subject to limits stated in the policy documents.

Cashless facilities in health insurance have defined boundaries, including policy exclusions (such as self-harm and war-related events), co-payments, sub-limits for specific heads like room rent, and waiting periods for selected treatments. Insurer approval is mandatory and can be declined for non-covered conditions. Under Cashless Everywhere, treatment may extend to non-network hospitals, but non-medical costs and expenses exceeding policy limits, including room rent caps, remain payable by the policyholder.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.