New Delhi District Commission Holds Mool Chand Kairatiram Hospital Liable For Non-Disclosure Of Approved Insurance Claim

Brief Facts:

Shri Mohinder Mohan Khanna (“Complainant”) was admitted to Mool Chand Khairatiram Hospital & Ayurvedic Research Institute (“Hospital”) on January 20, 2015. Upon admission, the Complainant paid an initial fee of Rs. 10,000. Following the treatment, an additional amount of Rs. 49,988 was deposited. Since the Complainant was covered by a health insurance policy from New India Assurance Co. Ltd. (“Insurance Company”), the hospital was informed to consider the policy benefits. However, the Complainant was notified that the amount of Rs. 49,988 had been calculated as the balance after approval from Raksha TPA Pvt. Ltd., a third-party administrator connecting the insured, insurer, and provider.

Upon direct inquiry with Raksha TPA, the Complainant discovered that the hospital had actually submitted a claim for Rs. 1,27,188, and Raksha TPA had approved Rs. 84,329. Feeling aggrieved, the Complainant filed a consumer complaint with the District Consumer Disputes Redressal Commission-II, New Delhi.

The Complainant alleged that the hospital engaged in unfair trade practices by issuing the bill before obtaining insurance claim approval and failed to inform him about the actual amount sanctioned by Raksha TPA. The Complainant argued that the hospital's actions were unprofessional and raised concerns about the discrepancy between the initial bill and the insurance claim. Additionally, the Complainant questioned why Raksha TPA only approved Rs. 84,329 when a claim of Rs. 1,27,188 had been made.

The Insurance Company countered the allegations, claiming that the claim had been settled in accordance with the policy's terms and conditions. The sum insured was Rs. 1,00,000, but the Complainant claimed Rs. 1,26,992, exceeding the policy coverage. The Insurance Company maintained that the claim had been calculated according to the policy's provisions and that there was no deficiency in their service.

Observations by the Commission:

After reviewing the documents presented during the case, the District Commission observed that the hospital had issued an invoice for the entire bill amount at the time of discharge, despite the approval from TPA Raksha. This discrepancy in actions was seen as a service deficiency on the part of the hospital. The District Commission found that the hospital's conduct indicated a failure to inform the Complainant about the approved amount.

Initially, the Insurance Company contested the Complainant's assertions, citing policy terms and conditions that limited the claim to the sum insured, which was Rs. 1,00,000. However, during the final arguments, the Insurance Company offered to settle the matter by paying Rs. 24,329, which represented the difference between the initial approval and the actual claim amount. This settlement offer was accepted by the District Commission.

Consequently, the District Commission held the insurance company responsible for withholding the amount that the Complainant was entitled to receive. The Insurance Company was directed to pay the offered amount of Rs. 24,329 to the Complainant. Additionally, the District Commission ordered the Insurance Company to pay Rs. 10,000 for the cost of litigation and harassment. Furthermore, despite not appearing before the District Commission, the hospital was directed to pay Rs. 5,000 for the same reasons.

Case Title: Surender Hohan Khanna vs Mool Chand Khairatiram Hospital and Ayurveda Research Institute and others

Case No.: CC/158/2016

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