Vadodara Consumer Forum Orders Insurance Company to Pay Mediclaim, Rejects Hospital Norms as Ground for Denial
In a significant ruling, the Vadodara District Consumer Disputes Redressal Commission has directed an insurance company to settle a mediclaim along with compensation and legal costs, holding that a patient cannot be penalized for a hospital's failure to comply with registration norms. The decision came on a complaint filed by Indradutt Pandya, a 63-year-old policyholder, who had his claim rejected after undergoing cataract surgery.
Background of the Case
Indradutt Pandya purchased a health insurance policy from The New India Assurance Company Ltd in 2003. In 2022, he underwent cataract surgery and filed a claim of Rs 44,700. However, Paramount Health Services and Insurance TPA Pvt Ltd, engaged by the insurer, rejected the claim. Pandya then approached the consumer commission in May 2023, seeking the claim amount with 18% interest, Rs 25,000 for mental harassment, and Rs 15,000 towards legal expenses.
Insurance Company's Arguments
The insurance company contested the claim on multiple grounds. It argued that Pandya failed to provide certain details about the hospital and contended that the facility was not registered under Vadodara Municipal Corporation norms. Additionally, the insurer pointed out that the hospital did not meet the requirement of being a 10-bed facility as per VMC circulars issued in 2016–17 and 2020–21, suggesting non-compliance with local regulations.
Consumer Commission's Observations
After hearing both sides, the commission made several key observations. It noted that while hospital registration may be mandatory under civic rules, the contractual obligation lies between the insurer and the policyholder. The forum held that denying reimbursement to a patient based on the hospital's compliance with municipal regulations is unjustifiable. Advocate Gaurang Bumiya, who represented Pandya, emphasized, "The requirement of registration is a matter between the hospital and the VMC. The treatment taken by the complainant does not become illegal."
The commission further highlighted that the treating doctor was certified and that rejecting the claim on technical grounds, including non-submission of certain hospital documents, was unreasonable. It stressed that the primary purpose of an insurance policy is to provide financial support during medical emergencies, and denying claims based on conditions not clearly communicated to the policyholder is unfair.
Final Ruling and Directions
In its final order, the consumer commission directed the insurance company to pay Rs 44,700 to Pandya as the claim amount. Additionally, it awarded Rs 2,000 for mental harassment and Rs 1,000 towards legal costs. This ruling underscores the importance of protecting policyholders' rights and ensuring that insurance companies do not use technicalities to avoid their obligations, especially in cases involving genuine medical treatments.
