What is claims adjudication?
Claims adjudication is the process an insurer or TPA uses to review a health insurance claim and decide whether to pay it in full, pay part of it, or reject it. It checks the claim against the policy: who is covered, what treatment was given, whether it was medically necessary, and which charges are payable.
A claim typically passes several checks: document verification (bills, discharge summary, reports), eligibility (is the patient covered and the policy active?), admissibility (is the illness covered, excluded or still in a waiting period?), and medical and billing review against policy limits and agreed hospital rates.
The result is the approved amount after deductions such as non-payable items, proportionate cuts for exceeding the room-rent cap, co-pay and sub-limits. AI claims adjudication automates the routine parts, such as reading documents, checking rules and flagging unusual bills, so simple claims settle faster and complex ones go to human reviewers.
In India
IRDAI rules set fixed timelines for settling a claim once all documents are received, and require insurers to decide on cashless requests within an hour. If a claim is wrongly cut or rejected, employees can complain to the insurer's grievance cell and then to the Insurance Ombudsman.
In practice
An employee submits a ₹2.4 L bill for knee surgery. Adjudication confirms the policy is active and the condition is past its waiting period, then deducts ₹6,000 for non-payable consumables and ₹18,000 in proportionate cuts because the room exceeded the cap. The insurer approves ₹2.16 L.
Common questions
What is AI claims adjudication?
Using software to read claim documents, check them against policy rules and flag anomalies automatically, so simple claims settle faster and reviewers focus on complex ones.
Why are health insurance claims partly rejected?
Common reasons are non-payable items, room-rent cap deductions, co-pay, sub-limits, waiting periods and missing documents.
Who adjudicates a group health insurance claim?
The insurer's in-house claims team, or the TPA appointed to service the policy.
How can employers speed up claims for employees?
Choose insurers and TPAs with strong turnaround records, encourage cashless over reimbursement, and give employees a clear document checklist and a helpdesk for escalations.