Cracking The Code: How India's New Health Claims Exchange Can Simplify Insurance For Everyone

As we approach the end of the year, one of the key changes in India’s fintech and health tech landscape is the introduction of the National Health Claims Exchange (NHCX). This digital platform is poised to transform the healthcare finance ecosystem, making the healthcare system more transparent, and patient-friendly. But what exactly is the NHCX, and why is it important for patients, hospitals, and the entire healthcare ecosystem?

What is NHCX? 

Launched under the Ayushman Bharat Digital Mission (ABDM), NHCX is designed to streamline and standardise the health insurance claim process. In simple terms, the NHCX is a bridge that links hospitals, patients, and insurers to streamline the insurance claims process. 

Traditionally, insurance claims have been a confusing and paperwork-heavy affair, with long waiting times and hidden costs. The NHCX aims to, if not eliminate, minimise these pain points by digitizing the entire process, allowing for digital and in some cases even real-time claims approvals and clearer communication for all parties involved.

As of July 2024, around 34 insurers and third-party administrators (TPAs) have integrated with NHCX, and approximately 300 hospitals are preparing to submit claims through the platform. (Source PIB). One of its primary objectives is to reduce out-of-pocket expenses for patients while providing faster claim settlements, especially for cashless insurance claims, which are expected to be processed within three hours post-discharge. Its goal is to reduce manual intervention, which currently dominates the claims process, and introduce a system where claims are processed digitally and quickly.

How Does It Benefit Patients?

Picture this: you’re at a hospital for treatment, and the last thing you want to deal with is complicated forms, unclear billing, and insurance delays. The NHCX simplifies this process by creating a digital platform. Patients no longer need to worry about waiting weeks for claim approvals, remaining in the dark as the exchange allows for quicker processing. Hospitals submit the claim digitally, insurers review it, and patients receive regular updates.

This system is crucial because it removes inefficiencies that have long plagued India’s healthcare system. It allows patients to focus on their recovery instead of their finances, hospitals to operate smoothly without administrative bottlenecks, and insurers to handle claims more accurately.

Patients can know up front what costs are covered by their insurance and what they will need to pay out of pocket. If needed they can even get these reviewed and decoded by other service providers. No more surprises in the form of unknown bills after a hospital visit. For example, if you’re undergoing surgery, the NHCX allows you to see the insurance coverage details before the procedure. 

How Does It Benefit Hospitals?

For hospitals, the NHCX brings significant administrative relief. The traditional claims process involves a lot of back-and-forth between the hospital and insurers, resulting in delays and inefficiencies. The digital platform replaces stacks of paperwork with an automated system, reducing errors and speeding up approvals. Hospitals benefit from faster payments and fewer disputes with insurers, freeing them to focus more on patient care.

Learn from the world but build for India

India isn’t the first country to integrate a digital health claims exchange. Several countries around the world have implemented similar platforms, offering valuable lessons in both the benefits and challenges. In Estonia, for example, the country’s digital healthcare system allows for seamless integration between electronic health records (EHRs) and insurance platforms. Patients and healthcare providers can access insurance coverage details and file claims through a single portal, reducing wait times and ensuring efficient processing ​(E-Estonia.com). This system has not only increased transparency but also helped Estonia reduce healthcare fraud.

Similarly, in Australia, HICAP, HICAPS stands for Health Industry Claims and Payments Service. It is an electronic payment and claiming system widely used by healthcare providers such as doctors, dentists and allied health professionals. It efficiently and conveniently processes health insurance claims and payments at the point of service.

By reducing the administrative burden on hospitals and insurers, the country has improved its overall healthcare efficiency. However, challenges such as data privacy and ensuring compatibility between different healthcare systems have posed hurdles​. In the United States, digitization of health claims through platforms like Medicare has increased efficiency, but data privacy remains a significant concern. The Health Insurance Portability and Accountability Act (HIPAA) has introduced stringent regulations to protect patient information, and similar safeguards will be necessary in India​.

Challenges in 2025 and beyond:

However, rolling out the NHCX across India is not without its challenges. One of the biggest hurdles to overcome in 2025 is getting hospitals, especially in rural areas, on board. 

Many smaller hospitals still rely on good old paper-based processes, and transitioning to a fully digital system can seem daunting. Additionally, the lack of adequate technological infrastructure in these areas makes the adoption of the NHCX more difficult.

To address these challenges, both government and private stakeholders need to step up. Providing training, technological support, and financial incentives can encourage hospitals to adopt the new system. The key is to show that while the initial learning curve may be steep, the long-term benefits of digitization far outweigh the costs. 

Despite these challenges, the NHCX offers several opportunities in the form of challenges, that can aid in improving healthcare in India:

Rural Technology Adoption: Rural hospitals have often lagged in adopting the latest technologies. The NHCX could serve as a catalyst for these hospitals to modernize, connecting them to the national healthcare network and improving the quality of care in underserved areas.

Insurance Coverage Expansion: A streamlined claims process will allow insurance companies to better understand patient needs, enabling them to offer more affordable and targeted insurance products. This could pave the way for micro-insurance plans, making healthcare more accessible to low-income families.

Data-Driven Healthcare: The NHCX will generate valuable data on healthcare trends, enabling policymakers to make informed decisions and improve public health initiatives.

The National Health Claims Exchange represents a major step forward for India’s healthcare system. 

However, for full-scale adoption, to crack the code efficiently, continued government and private sector collaboration will be key. If implemented effectively, the NHCX can pave the way for a brighter, more equitable future in healthcare for all Indians.

Saurabh Soni

Guest Author Co-Founder, Digisparsh