A consumer forum in Vadodara has ruled in favour of a policyholder, proclaiming that a patient should not face penalties for deficiencies in a hospital’s registration processes. This decision arrived following a complaint brought forward by Indradutt Pandya, a 63-year-old resident who sought compensation for a health insurance claim. The Vadodara District Consumer Disputes Redressal Commission mandated the insurance company to process the claim and provide additional compensation as well as cover legal costs.

Details of the Insurance Claim Case

Pandya purchased a health insurance policy from The New India Assurance Company Ltd in 2003. Following cataract surgery in 2022, he submitted a claim amounting to Rs 44,700. However, this claim was subsequently rejected by Paramount Health Services and Insurance TPA Pvt Ltd, which managed the insurance on behalf of the firm. This rejection prompted Pandya to escalate the matter to the consumer commission in May 2023, demanding the claim amount along with 18 per cent interest, Rs 25,000 for mental distress, and Rs 15,000 for legal expenses incurred.

The insurance company defended its position by asserting that the claim could not be processed due to the policyholder’s failure to provide certain necessary information regarding the hospital. They further claimed that the hospital did not possess valid registration under the Vadodara Municipal Corporation’s regulations. Additionally, the insurer indicated that the facility did not meet the stipulated requirement of being a 10-bed medical institution as stated in VMC directives from 2016–17 and 2020–21.

The commission, after considering the arguments presented, concluded that despite the necessity for hospital registration according to local rules, the agreement exists solely between the insurer and the policyholder. The commission stated that reimbursement cannot be denied based on the hospital’s compliance issues with municipal regulations.

Commission’s Perspective on Claim Rejection

The forum highlighted that the healthcare provider who treated Pandya was duly certified and emphasised that denying the claim on the grounds of technicalities, including the non-submission of required hospital documents, was unjustifiable. The commission reiterated that the fundamental purpose of an insurance policy is to extend financial assistance during health emergencies. The decision pointed out that rejecting claims based on undisclosed conditions to the policyholder is inherently unfair.

Accordingly, the commission ruled that the insurer must pay the original claim of Rs 44,700 to Pandya along with an additional Rs 2,000 to address the mental distress he experienced and Rs 1,000 to cover legal expenses. The conclusion affirms that policyholders should not be adversely affected due to oversights or compliance deficiencies on the part of medical facilities, particularly when the treatment received is legitimate and administered by a qualified professional.

This ruling serves as a significant reminder for insurance providers to ensure that claims are handled fairly, transparent, and without imposing undue burdens on policyholders due to external compliance matters.

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