In a significant ruling that reinforces the primacy of medical professionals over insurance companies in treatment decisions, the Ghaziabad District Consumer Disputes Redressal Commission (DCDRC) has directed Star Health and Allied Insurance to honour a Covid-19 related claim it had earlier rejected. The commission sternly stated that decisions regarding the line and method of treatment rest solely with the medical fraternity, not the insurer.
The Case: A Rejected Claim and a Legal Battle
The case was filed by Nitu Nagar, a resident of Dadri, on September 1, 2022. Her husband, Ajay Nagar, had been a policyholder under Star Health's Family Health Optima Insurance Policy since 2018, renewing it annually without fail. In January 2022, during the policy's fourth year, Nitu Nagar was admitted to Yatharth Hospital in Greater Noida with high fever and breathing difficulties.
Following protocol, the family informed the insurance company for a cashless claim and were initially assured of approval. However, the insurer later refused to clear the hospital bills, which totalled Rs 49,423. The family paid the amount from their own pocket and applied for reimbursement. After their claim was denied, Nagar sent a legal notice to Star Health on August 3, 2022, but received no response, leading her to approach the consumer commission.
Insurer's Defence vs. Commission's Verdict
During the proceedings, Star Health defended its position in a written reply, asserting it acted within the policy's terms. The company argued that the medical documents indicated the patient had only "simple complaints" like fever and body pain, suggesting asymptomatic Covid-19. Citing government guidelines, the insurer maintained that such a condition did not require hospitalisation and could be managed in home isolation, which formed the basis for the claim's rejection.
The commission, comprising President Anil Kumar Pundir and Member Anju Sharma, delivered its order on November 26. It categorically dismissed the insurer's argument. The panel observed that an insurance company cannot override the clinical judgement of a treating doctor. "If medical experts deem hospitalisation necessary, the insurer cannot insist that treatment be carried out at home," the commission stated.
A Landmark Order with Financial Penalty
Declaring the claim rejection as a "deficiency in service," the commission directed Star Health to settle the claim. The insurer must reimburse the hospital charges of approximately Rs 50,000 along with an annual interest of 6% from the date the claim was filed. Additionally, the company was ordered to pay Rs 2,000 towards litigation costs. The entire payment must be completed within 30 days of the order's issuance.
This ruling sets a clear precedent for similar disputes, emphasising that the necessity of hospitalisation is a decision for medical professionals based on their assessment of the patient's condition at the time. It curtails the ability of insurance firms to second-guess doctors' treatment plans based on a retrospective analysis of paperwork.
