Chandigarh-based health insurance firm penalised ₹25,000 for rejecting mediclaim

The forum directed the firm to pay ₹15,000 as compensation for causing mental agony and harassment and to pay ₹10,000 as costs of litigation

The District Consumer Disputes Redressal Commission has penalised a city-based health insurance company for rejecting a cashless payment claim, citing that the medical record and the documents submitted by the hospital did not show any such medical condition and circumstances which necessitated OPD admission of the insured patient, and the hospitalisation and IPD treatment was not warranted.

Parminder Singh, of Nawanshahr, Punjab, had submitted in a complaint that he had taken a mediclaim policy namely a “family health optima insurance plan” for himself and his wife, Baljit Kaur, from Star Health and Allied Insurance Co. Limited, Chandigarh. (Getty Images/iStockphoto)

Parminder Singh, of Nawanshahr, Punjab, had submitted in a complaint that he had taken a mediclaim policy namely a “family health optima insurance plan” for himself and his wife, Baljit Kaur, from Star Health and Allied Insurance Co. Limited, Chandigarh. The policy was valid from June 9, 2022, to June 8, 2023, and he paid a premium of ₹21,789 with a sum insured of ₹5 lakh for both.

Parminder alleged that in September 2022, Baljit Kaur fell ill and was hospitalised. The treating hospital had sent a cashless request for ₹90,000 to the insurer but the claim was rejected on the ground that the diagnosis was for AFI gastritis and the patient should have been treated on an OPD basis and was not required hospitalisation.

A clarification was said that it was an emergency case. Since the claim was rejected, another bill of ₹1,03,166 was raised by the hospital, but when the complainant resisted, he was asked to pay ₹83,165 in cash.

Alleging that the act amounts to deficiency in service and unfair trade practice, a consumer complaint was filed.

In the commission, the insurance company resisted the claim stating that at the time of initiating the cashless hospitalisation request, medical record and the documents submitted by the hospital did not in any manner show any such medical condition and circumstances which necessitated OPD admission of the insured patient and the hospitalisation and IPD treatment was not warranted. Also, certain documents were not submitted.

Hearing both sides, the forum observed that it is safe to hold that the act of the insurance company amounts to a deficiency in service and unfair trade practice as the insured is not required to repeatedly approach the insurer to process the claim. “It is generally seen that insurance companies at the time of inception of policy receive hefty premiums from the consumers, but try to repudiate their genuine claims on one or the other ground,” the commission observed.

It directed the insurance company to pay ₹83,165 to the complainant, along with interest @ 9% per annum from the date of payment by the complainant that is from September 28, 2022, onwards. The forum directed to pay ₹15,000 as compensation for causing mental agony and harassment and to pay ₹10,000 as costs of litigation.