West Delhi District Commission Holds National Insurance Co. Liable For Repudiating Patient's Claim Based On 3rd-Party Administrator's Reports

Brief Facts:

Mr Sunil Jain (“Complainant”) obtained insurance coverage for his family, including his wife and three children, through National Insurance Company Ltd. (“Insurance Company”) under the National Parivar Mediclaim Policy, with a total sum insured of Rs. 1 lakh. The Complainant was admitted to Maharaja Agrasen Hospital (“Hospital”), Punjabi Bagh on the advice of Ahimsa Dham Jan Charitable Trust. The Complainant's wife informed the Hospital's Third-Party Administrator (“TPA”) Panel about the insurance policy and submitted the necessary documents. Despite this, the Insurance Company sent a query to the Hospital and the Complainant and subsequently denied the cashless facility. Subsequently, the denial led to financial distress for the Complainant's family, forcing them to pledge jewellery to pay the Hospital charges. The Complainant, as the sole breadwinner, filed for a reimbursement claim of Rs. 47,971 which the Insurance Company treated as a "No Claim". Thereby, the Complainant made several communications to the Insurance Company but didn't receive a satisfactory response. Feeling aggrieved, the Complainant filed a consumer complaint in the District Consumer Disputes Redressal Commission-III, West Delhi (“District Commission”).

In response, the Insurance Company contended that the Complainant's claim was denied based on reports from their TPA, citing policy clauses 4.3 & 4.9. It contended that the claim was for Hospitalization solely for diagnostic and evaluation purposes, related to hypertension and its complications, which are covered in the third year of the running policy. According to it, this claim was processed under the first year of the policy, making it non-payable as per the terms and conditions. It pointed to the history report and discharge summary from the Hospital, stating that the Complainant was admitted with complaints of generalized weakness and highlighted that the Complainant was discharged at his request. The tests conducted, including an MRI brain, 2D Echo, Carotid Doppler study, and thyroid profile, showed normal results. The Insurance Company maintained that the patient's condition was stable, and discharge was insisted upon by the patient's attendant.

Observations by the Commission:

The District Commission deliberated on the critical question of what alternative course of action was available to the Complainant other than seeking assessment and treatment at the Hospital to mitigate potential risks to his life. The District Commission emphasized the doctor's role in determining the necessary treatment to safeguard the patient's life, thereby noting that the Insurance Company plays a minimal role in the same. The District Commission noted that the role of the Insurance Company is primarily confined to indemnifying the insured against medical risks through the collection of premiums. The District Commission gave weight to the treating doctor's certificate justifying the admission and continued follow-up based on the Complainant's symptoms.

Further, the District Commission found the Insurance Company's reliance on the opinion of its TPA without supporting medical expertise to be insufficient. The District Commission held that there is a tendency for insurance companies to evade their liability and reject genuine claims based on policy clauses. Consequently, the District Commission held that the rejection of the Complainant's legitimate and genuine claim by the Insurance Company was arbitrary and against the principles of natural justice.

Subsequently, the District Commission directed the Insurance Company to reimburse the Complainant's medical expenses of Rs. 47,971/- along with interest at 6% per annum from the date of filing the claim until final realization. Additionally, recognizing the harassment and mental agony faced by the Complainant, the District Commission ordered the Insurance Company to pay compensation of Rs. 15,000/- and litigation expenses of Rs. 10,000/- to the Complainant.

Case Title: Sunil Jain vs National Insurance Company Ltd.

Case No.: Complaint Case No. 157/2018

Advocate for the Complainant: Pooja Jain

Advocate for the Respondent: None (Ex-parte)

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