It’s not unheard of for insurers to ask for “more documents” after an insurance claim is submitted by the policyholder. This kind of formal request is known as a shortfall letter in health insurance. But what does it exactly mean? Is your claim at risk? We break it down for you in this article.
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A shortfall letter in health insurance is typically the insurer’s way of informing the policyholder that certain required documents are missing, or some information is incomplete, and are needed to process the claim. It can also be used to notify the policyholder when the insurer is unable to cover the full amount of the final hospital bill due to the terms and conditions of the policy.
This letter is part of the standard procedure, generally issued during cashless claims or reimbursement. It’s not a rejection of your claim but more of a request from the insurer to ensure all claim-related details are accurate and in line with the policy’s terms.
There are multiple reasons you could receive a shortfall letter, but generally, they are quick fixes. Some of the common reasons include
No matter the reason, the shortfall letter will clearly state the gaps or why the full amount isn’t being paid. Once you submit the required documents, the insurer will re-evaluate the claim accordingly.
Although a shortfall letter is not a claim rejection, it can be easily misunderstood for one. In fact, in health insurance, the terms shortfall letter and shortfall cover can also create confusion for the policyholder due to their similar names.
Let’s take a look at the table below for a side-by-side comparison.
| Shortfall Letter | Claim Rejection | Shortfall Cover |
| Request by insurer for missing information or documents | Denial of claim after review by insurer | Optional add-on benefit to cover the gap between final bill and policy limit |
| Sent during claim processing | Issued after claim review | Applied during hospitalisation or claim settlement |
| Claim is put on hold but not rejected | Claim is fully rejected | Claim is paid with reduced out-of-pocket expense |
| Policyholder is required to submit the documents within the stated timelines | Policyholder can appeal or accept rejection | No action is required by policyholder if opted in |
| Helps complete claim details | Finalises claim rejection | Reduces medical expenses |
First of all, don’t panic. Consider the shortfall letter to be just a speed bump in your claim process.
The letter will mention exactly what’s needed. Based on this requirement, get in touch with the hospital for missing bills, incomplete treatment notes, discharge summary, etc. If you require further clarification, go ahead and connect with your treating doctor. After collecting the necessary information or documents, submit them as stated in the letter. This could be via email, insurer portal or TRA platform. You are typically expected to respond within a week of receiving the shortfall letter, but be sure to confirm the timelines.
Once the submission is done, you can follow up on the same through the insurer’s website or mobile app. If you have any queries, don’t hesitate to speak to a customer service executive or your insurance advisor.
Just ensure all your paperwork and documents are in check before submission. Staying organised from the start is one of the easiest ways to reduce your chances of receiving a shortfall letter.
As a policyholder, the most notable disadvantage of a shortfall letter is the delay it causes in claim settlement. This delay can get further prolonged when you require documents that could be difficult to obtain quickly.
On the positive side, receiving a shortfall letter is better than having your claim rejected. In that sense, this letter gives the policyholder a chance to fix and settle their claim. It also ensures proper documentation for both the parties.
A shortfall letter in health insurance is simply a checkpoint in your claim process. By understanding what a shortfall letter is, and isn’t, and how to handle it, can help you navigate the health insurance process with more confidence. With a little attention to detail and prompt action on your part, it can be resolved smoothly.
Whether you’re making a cashless claim or going for reimbursement, remember to keep all your documents and reports organised.
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Reviewed by Dr. Harshita Dahiya 
Acko Technology & Services Private Limited
#36/5, Hustlehub One East, Somasandrapalya, 27th Main Rd, Sector 2, HSR Layout, Bengaluru, Karnataka 560102
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