No grounds for mediclaim denial: Consumer Commission orders insurance company to pay Rs 10.5 lakh
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Delhi: The Delhi Consumer Commission has directed National Insurance Company to reimburse Rs 10 lakh, along with interest at the rate of 7 per cent per annum and pay Rs 50,000 towards litigation expenses to the legal heirs of a woman policyholder who died during the pendency of the case. The Commission observed that the treatment for which the claim was sought was not connected to any pre-existing medical condition.
The order was passed by a bench comprising President Sonica Mehrotra and members Richa Jindal and Anil Kumar. The bench held that the insurer had failed to provide adequate justification for rejecting the claim.
According to case records, the complainants had purchased a mediclaim policy on January 27, 2015, with a third-party administrator (TPA) appointed for claim processing and cashless insurance services. The policy remained valid until January 26, 2016, and was subsequently renewed on January 12, 2016, extending coverage until January 26, 2017, reports The Indian Express.
On January 6, 2016, the policyholder was admitted to the emergency ward of Max Hospital, Saket, with complaints of weakness, fever, and breathing difficulties caused by a severe cold and cough. She was diagnosed with Type 1 Respiratory Failure and shifted to the intensive care unit for ventilator support.
Initially, the treating doctor indicated that the respiratory failure could be linked to her underlying chronic anaemia. However, after further evaluation and treatment, the same doctor concluded that the condition was unrelated to her pre-existing anaemia. Following several medical procedures, she was discharged from the hospital on February 20, 2016. TPA denied the cashless facility as the doctor’s initial screening connected the patient’s respiratory failure with her pre-existing chronic anaemia. The patient's daughter had several communications with TPA over email, but eventually, the claim of a cashless facility was not granted, reports The Daily.
The District Consumer Disputes Redressal Commission noted that the complainant’s claim was rejected because the patient has a case of Hereditary Hemorrhagic Telangiectasia with chronic anaemia for a long time. The commission relied on Rita Malhotra’s “hereditary Hemorrhagic Telangiectasia”, but later it was determined that the treatment had no connection with the pre-existing condition.
The court also noticed that it is the responsibility of the party alleging the nexus of pre-existing disease with the treatment to bring proof in support of the allegation.
According to The Daily, the commission also observed that an insurance policy of Rs 5,00,000 was purchased for two insured persons; hence, each of the insurers can only seek mediclaim upto Rs 2,50,000 each. But, in the course of the proceedings, the insurer failed to legitimise that, according to the policy terms and conditions, only one person was entitled to only 50 per cent of the policy, and therefore the petitioner was entitled to seek mediclaim under the policy as per the available limit.
Advocate Harshita Verma, representing the complainants, pointed out that the treatment cost was Rs 31,28,367.21, out of which the complainants paid Rs 25,38,000 to Max Hospital. It was submitted that on February 29, 2016, the claim form was filed by TPA on behalf of the complainants with the National Insurance Company, but was rejected.
Alleging unlawful and arbitrary, the complainant stated that the rejection of the claim can be termed as a deficiency in service. The complainants argued that the insurer’s manipulation of a policy clause for its own benefit amounted to an unfair trade practice and a deficiency in service. They also claimed that rejecting a claim because the condition was a complication of a pre-existing illness was vague and unfair, and could not be used to deny coverage.
They sought Rs 10 lakh reimbursement based on a January 2016 policy renewal before the complainant’s hospital discharge, plus compensation. During the case, Rita Malhotra died on 13 February 2018, and her legal heirs were substituted.
