In a significant ruling strengthening patient rights, the Ghaziabad District Consumer Commission held that an insurance company cannot substitute its own judgment for that of qualified medical professionals while deciding health insurance claims. The Commission ruled against Star Health and Allied Insurance for wrongfully denying a COVID-19 hospitalization claim, terming the rejection as a clear deficiency in service.
Brief Facts of the Case
The insured policyholder was hospitalised for COVID-19 treatment based on medical advice. Star Health rejected the reimbursement claim on the ground that the patient’s symptoms were not severe and that treatment could have been taken at home instead of hospitalisation.
Issue for Consideration
Whether an insurance company can deny a medical reimbursement claim by questioning the necessity of hospitalisation when the same has been advised by a treating doctor.
Findings & Ruling
The District Consumer Commission ruled in favour of the policyholder and observed that:
- Decisions regarding hospitalisation and treatment rest exclusively with qualified medical professionals.
- An insurance company cannot act as a medical expert or overrule a doctor’s clinical assessment.
- Denial of the claim on the insurer’s subjective view amounted to arbitrary rejection and deficiency in service.
Relief Granted
The Commission directed Star Health and Allied Insurance to:
- Pay ₹50,000 towards the wrongly denied claim
- Pay interest at 6% per annum on the amount
- Pay ₹2,000 as litigation costs
Significance of the Judgment
- Strengthening Patient Rights: Reinforces that medical decisions must be respected and cannot be second-guessed by insurers.
- Accountability of Insurers: Discourages arbitrary claim rejections based on internal assessments rather than medical evidence.
- Consumer Protection: Sends a strong message that insurers must adopt a patient-centric approach, especially in health emergencies like COVID-19.
Key Takeaway
If hospitalisation is advised by a treating doctor, an insurance company cannot deny reimbursement by claiming that home treatment would have been sufficient.
Case Title
Star Health and Allied Insurance Co. Ltd. vs Policyholder
(Ghaziabad District Consumer Disputes Redressal Commission)