Why AYUSH Health Insurance Claims Get Rejected Despite IRDAI Rules

Why AYUSH Health Insurance Claims Get Rejected Despite IRDAI Rules

In January 2024, the Insurance Regulatory and Development Authority of India (IRDAI) took a landmark step by mandating parity for AYUSH claims (Ayurveda, Yoga, Naturopathy, Unani, Siddha, and Homeopathy) with allopathic treatments in health insurance policies.

But months later, patients continue to face a harsh reality: AYUSH health insurance claims are still frequently denied, even when treatment is medically necessary and provided at accredited hospitals.

Real Stories, Real Struggles

❌ Case 1: Rejection Despite NABH Accreditation

Chhattisgarh’s Moin Vanak, suffering from chronic pain and sleep issues, turned to a NABH-accredited naturopathy centre for inpatient treatment. Although he had a valid health insurance policy, his claim was rejected.
Reason? The insurer said it was a “diagnostic visit,” not medically necessary IPD (inpatient department) care.

Even after a doctor’s written justification, the claim remains pending.

❌ Case 2: Claims Denied for Diabetes Support

Mumbai-based CA Mayank Gosar’s diabetic parents underwent intensive Ayurvedic therapies. Despite detailed diagnostic reports and medical letters, the mother’s claim was denied outright and the father’s claim has been under process for over a year.

“We did everything right—NABH hospital, documented care, formal diagnosis—yet rejection came,” Gosar said.
He has now escalated the matter to the Insurance Ombudsman.

What IRDAI’s AYUSH Guidelines Say

As per IRDAI’s circular (Jan 2024):

• AYUSH must be treated on par with allopathy
• No exclusions or sub-limits permitted for AYUSH treatments in base policy
• Insurers must:
  • Empanel AYUSH hospitals
  • Sign MOUs and define standard operating protocols
  • Prevent misuse and fraud with documentation protocols

Yet in practice, many insurers have interpreted the mandate differently. For instance:

• Star Health excludes yoga and naturopathy
• Niva Bupa’s ReAssure 2.0 excludes yoga-based inpatient therapies

Why AYUSH Health Insurance Claims Are Still Rejected

1. Lack of Clear Justification

Insurers demand evidence of curative intent, not preventive or wellness-based admission.

You cannot walk into an AYUSH facility for general wellness and expect claim approval.

2. Hospital Accreditation vs Network Status

NABH accreditation is essential but not enough. The hospital must also be on the insurer’s network panel.

3. Documentation Gaps

• Diagnostic reports missing
• Discrepancy in supervising physician
• Missing IPD protocols or therapy notes

Even minor inconsistencies may lead to rejection.

4. Misunderstanding of Treatment Purpose

As Apollo AyurVAID’s COO Sreejith Edamana explains:

“AYUSH’s treatment path differs from conventional medicine. It requires orientation at the claim adjudication level.”

Insurer Perspective

According to Bajaj Allianz:

• AYUSH claim volume has risen by 30%
• Payouts have increased by nearly 48%

But insurers argue that ground-level execution—especially by newer AYUSH centres—needs more clinical discipline and standardisation of records.

What Policyholders Must Check Before Starting AYUSH Treatment

✅ Is the AYUSH hospital NABH-accredited?
✅ Is it part of your insurer’s empanelled network?
✅ Is there a written diagnosis from a registered AYUSH practitioner?
✅ Will treatment be supervised by qualified doctors?
✅ Does your policy exclude certain AYUSH branches like yoga?
✅ Do you have inpatient justification with medical records?

Common Errors That Lead to Claim Rejections

AYUSH vs Wellness – Know the Difference

Insurance covers treatment for:
✔️ Disease
✔️ Illness
✔️ Accidents
✔️ Infections

It does not cover:
❌ General detox packages
❌ Preventive blood sugar control
❌ Weight-loss or spa-based therapy

What Needs to Change

• ✅ IRDAI enforcement of uniform SOPs
• ✅ Standard treatment packages for AYUSH
• ✅ Revised CGHS rates to reflect real-time pricing
• ✅ Training for claim reviewers to understand AYUSH modalities
• ✅ Greater collaboration between insurers and AYUSH hospitals

Surprisingly, even Ayushman Bharat—India’s flagship public insurance—does not yet cover AYUSH treatments, despite government push for integrative care.

💬 Need help with your AYUSH claim? Email us at info@estabizz.com

📜 Disclaimer

This blog is intended for informational purposes only and does not constitute insurance or legal advice. Insurance claims are subject to individual policy conditions, underwriting practices, and evolving IRDAI regulations. AYUSH coverage may vary across insurers and is contingent on hospital accreditation, documentation completeness, and treatment protocols. Readers are encouraged to consult certified advisors or insurers directly for personalised guidance. Estabizz Fintech does not endorse any specific insurance company and shall not be held liable for claim decisions.

This blog post is intended for general informational purposes only and should not be construed as insurance, legal, or medical advice. While every effort has been made to ensure accuracy, health insurance policies—including coverage for AYUSH treatments—vary significantly across insurers and are subject to policy-specific terms, conditions, and regulatory updates as per the Insurance Regulatory and Development Authority of India (IRDAI). Readers are advised to thoroughly review their individual policy documents and consult directly with licensed insurance advisors or their respective insurers for personalised guidance. Estabizz Fintech assumes no responsibility or liability for decisions made based on the information presented herein, including any claim rejections, policy misunderstandings, or financial consequences arising from reliance on this content. Use of this blog is at the reader’s sole discretion and risk.

Conclusion Insert

As more people explore holistic healing, understanding how to navigate AYUSH health insurance claims becomes critical for successful reimbursements. As awareness grows, the need to strengthen documentation and clarify eligibility will help more patients successfully file AYUSH health insurance claims.

Health insurance claim new rules: Irdai issues circular for insurers to decide on cashless authorisation in 1 hour

Is Your Health Insurance Plan Being Withdrawn? Here’s How to Quickly Adjust and Stay Protected