Star Health Targets AI-Driven Settlement for Majority of Cashless Claims

Cashless claims represent nearly 85% of the total claim value and around 70% of the claim volume processed. Currently, about one-fifth of these claims are processed entirely through AI without any human involvement.

Star Health Insurance has announced plans to significantly expand the use of artificial intelligence in claims processing, aiming to settle the majority of its cashless claims through AI-enabled straight-through systems within the next two years.

The shift comes as regulators in India have tightened timelines for claim approvals. Insurers are now required to complete pre-admission authorisation within one hour and post-discharge authorisation within three hours.

To meet these requirements consistently, insurers are increasingly adopting digital systems and AI-driven automation to streamline approvals and reduce manual interventions.

Star Health, currently the largest health insurance provider in India by premium collection, says AI is already handling a growing share of cashless claims. Cashless claims represent nearly 85% of the total claim value and around 70% of the claim volume processed by the insurer.

At present, about one-fifth of these claims are processed entirely through AI without any human involvement.

"Cashless claims account for about 85% of claim value and roughly 70% by number. Around 20% of claims are processed straight through using AI without human intervention, and we aim to increase this to over 50% in two years. Human intervention will primarily be for exceptions, high-value claims, or suspected fraud," said Anand Roy, CEO, Star Health.

Cashless claims allow patients to receive treatment at network hospitals without paying upfront for covered services. In such cases, hospitals submit treatment requests to insurers, who approve the procedures and directly settle the bills with the healthcare facility according to pre-negotiated rates.

However, hospital pricing in India remains largely unregulated, which has historically led to variation in treatment costs across hospitals. To address this challenge, the General Insurance Council has been working with hospitals to establish standardised schedules of rates and treatment protocols.

The council is also pursuing a broader industry initiative to streamline hospital empanelment and digital connectivity. One of the key goals is to create a common network of hospitals accessible to multiple insurers, with a target of onboarding at least 10,000 healthcare facilities.

Digital infrastructure is expected to play a central role in this transformation. Platforms such as the National Health Claims Exchange (NHCX) and the Ayushman Bharat Health Account (ABHA) are being integrated to enable secure data exchange, faster claims validation, and improved interoperability between hospitals and insurers.

Stay tuned for more such updates on Digital Health News