ESI's Refusal To Reimburse Medical Expenses On Minor Technical Grounds Arbitrary: Kerala HC

Background

Mrs. Suma Sunilkumar, insured under the ESIC scheme, sought reimbursement for her husband's emergency liver transplantation expenses. Her husband, suffering from stage C cirrhosis, was initially treated at the ESI Hospital, Olarikkara. Due to the lack of adequate liver transplantation facilities, he was referred to a private hospital, Aster Medcity, for surgery. The transplantation was performed on October 4, 2023.

However, Suma alleged that despite submitting all necessary documents, the ESIC refused to process the claim. However, ESIC stated that the claim cannot be processed as the emergency certificate was not submitted on time. Suma immediately submitted the required certificate. Even then, ESIC did not process the reimbursement. Aggrieved, Suma filed a writ petition.

Arguments

Suma's counsel argued that the refusal to reimburse the expenses was arbitrary and illegal. He submitted that the surgery had been approved by the ESIC's Technical Committee, and all requested documents, including the emergency certificate, were eventually provided. The refusal to honor the claim, he argued was arbitrary, unconscionable, and illegal.

However, ESIC's counsel contended that the claim could not be processed as the emergency certificate and certain other documents were not submitted on time. They maintained that reimbursement for private treatment was permissible only if the criteria mentioned in the ESIC rules are met. Not submitting the emergency certificate, he argued, disentitled them from claiming reimbursement.

Court's Reasoning

The court noted that the ESI Hospital itself referred the patient for a liver transplant and that the Technical Committee had also approved the procedure. It also considered undisputed that the ESI Hospital lacked the necessary infrastructure to perform the surgery, making the referral to a private hospital essential.

Further, the court ruled that the emergency certificate confirmed the patient's critical condition, who had a high risk of death without immediate surgery. It held that insisting on minor procedural technicalities was overly rigid and unwarranted, especially when the emergency certificate was subsequently submitted.

Referring to Shiv Kant Jha v. Union of India [(2018) 16 SCC 187], the court held that the test for reimbursement of medical claims is the factum of treatment. The authorities must ensure that the treatment was actually taken, and all the relevant facts are supported by certified records. Once these criteria are met, the court ruled that the claim cannot be denied on technical grounds. Applying this test, the court concluded the ESIC's refusal in this case lacked any justification.

Additionally, the court explained that medical reimbursement cannot be denied only because the treatment took place at a private hospital. It noted that the ESIC had also approved the procedure at Aster Medcity, negating any claim that they didn't know of the patient's condition. Thus, the court allowed the writ petition and directed the ESIC to process Suma's request within 60 days.

Case Title: Mrs. Suma Sunilkumar v. The State Medical Officer

Citation: 2025 LiveLaw (Ker) 2

Counsel for Petitioner: Mr. K.S. Bharathan, Mr. Aadithyan S. Mannali, Ms. Aleena Sony, and Mr. Vishal L.

Counsel for Respondent: Ms. Deepa Narayanan, Mr. T.V. Ajayakumar, Mr. P. Jayabal Menon, and Ms. Rekha Agarwal.

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