Cashless approval cannot be withdrawn at discharge: Kalaburagi District Consumer Disputes Redressal Commission

You don’t have any Active Subscription.

Account subscription benefits alongside Premium Stories, Editorials, Opinions and more. Unlock these with Subscription

Advocate Vaijanath S. Zalaki handing over the ₹2.39 lakh insurance claim amount to the beneficiaries at their residence in Kalaburagi on Friday (September 11). | Photo Credit: ARUN KULKARNI

In a significant order in a health insurance claim dispute, the Kalaburagi District Consumer Disputes Redressal Commission has held that an insurance company cannot withdraw the approval for cashless treatment at the time of discharge from the hospital and reject the claim on the ground of a waiting period.

The commission has directed Niva Bupa Health Insurance Company to pay a total of ₹2,39,574 to the complainants, covering the medical expenses incurred for treatment, compensation for deficiency in service and mental agony, and litigation costs.

The order was recently passed by the commission’s in-charge president Malathi Guranna and member M. Lokesh. The complaint was filed by Shali Nazir and his son Shali Khader Basha against Niva Bupa Health Insurance Company and Policybazaar Insurance Brokers Pvt. Ltd.

According to the case, Shali Nazir had purchased a family floater health insurance policy from the insurance company through Policybazaar by paying an annual premium of ₹37,460. The policy carried a sum insured of ₹10 lakh and covered the complainant, his wife and son. The original policy was valid from November 11, 2022, to November 17, 2023, and was subsequently renewed for the period from November 18, 2023, to November 17, 2024.

During the renewed policy period, the second complainant developed sudden pain in his right knee. He underwent an examination at Spectrum Diagnostics and Healthcare Centre in Bengaluru on April 3, 2024, and was subsequently examined at Apollo Hospital, Bengaluru, on June 15, 2024. Doctors advised surgery.

The complainants approached the insurance company through the hospital seeking approval for cashless treatment. The insurer initially approved the cashless treatment. However, at the time of discharge, the company abruptly withdrew the approval through an email and rejected the claim, citing Clause 6.2(f) of the policy and stating that the 24-month waiting period applicable to the treatment had not been completed.

As a result, the complainants had to bear ₹2,24,574 towards the medical expenses at Apollo Hospital. Alleging deficiency in service on the part of the insurer, they approached the district consumer commission through advocate Vaijanath S. Zalaki seeking relief.

After examining the period of the original policy and its renewal, the date of treatment and the documents produced by the insurance company, the commission held that the insurer’s rejection of the claim under Clause 6.2(f) was not justified. It particularly took exception to the insurer first granting approval for cashless treatment and subsequently withdrawing the approval when the patient was being discharged from the hospital.

The insurer was directed to pay ₹2,24,574 towards the medical expenses, ₹10,000 as compensation for deficiency in service and mental agony, and ₹5,000 towards litigation expenses, totalling ₹2,39,574. The amount has to be paid within 45 days from the date of the order. In case of delay, the insurer has been directed to pay interest at 6% a year on the amount from July 28, 2026, until the date of payment.

The first opposite party, the insurance company, appeared before the commission and contested the complaint. The second opposite party, Policybazaar Insurance Brokers Pvt. Ltd., remained absent despite service of notice and was proceeded against ex parte.

In a gesture aimed at ensuring that the benefit of the consumer commission’s order actually reached the aggrieved consumer, advocate Vaijanath S. Zalaki, who represented the complainants and provided his legal services to the complainants free of cost, personally visited their residence and handed over the demand draft for ₹2,39,574 received from the insurance company.

Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of The Hindu and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.