The Kannur District Consumer Dispute Redressal Commission has recently ruled against an insurance provider for failing to deliver adequate service and engaging in unfair trade practices. The commission mandated the insurer to compensate a police department employee with Rs 86,263 after he encountered difficulties while utilizing the Medical Insurance Scheme for State Employees and Pensioners (MEDISEP) for his mother’s emergency treatment at a designated hospital, forcing him to cover part of the medical expenses out of pocket.
During the proceedings, led by President Ravi Susha alongside members Molykutty Matthew and Sajeesh KP, the complaint was examined, which detailed the employee’s grievances against both the insurance firm and the third-party administrator (TPA) associated with MEDISEP. The complainant asserted that his legitimate claim, which was covered under his policy, had been unjustly denied.
The commission’s order, issued on September 28, noted, “Under the MEDISEP framework, beneficiaries are entitled to reimbursements for medications even after hospital discharge. The TPA rejected the reimbursement request, leading to significant mental distress and financial loss for the complainant. This constitutes a deficiency in service and unfair trade practices by the TPA and the insurer. Consequently, the hospital’s liability has been absolved.”
The complainant explained that his insurance policy included coverage for his wife, mother, and children. Following a sudden stroke, his mother required hospitalization in Mangaluru on February 2, 2024. He presented his MEDISEP card upon admission, which assured him of a cashless treatment process.
Fifteen days later, on March 3, the hospital requested an advance payment of Rs 50,000 for his mother’s continued stay. He inquired about the current hospital bill and was informed it amounted to below Rs 1.5 lakh, well within the MEDISEP coverage limit of Rs 4.5 lakh.
The attending physician recommended an additional ten days of treatment due to the lack of improvement, but the complainant requested discharge. By March 2, the total expenses had reached Rs 1.40 lakh, yet only Rs 38,800 was approved for coverage by the insurance company, with the hospital providing a discount of Rs 27,085. Consequently, the complainant had to pay Rs 74,263 personally.
He contended that he should receive full reimbursement for the bill, as it did not exceed Rs 1.40 lakh, asserting that the insurance company had no grounds to deny his claim, which was valid under the policy. Following this, he sent a legal notice to the TPA and the insurance provider on March 3, leading to a partial payment of only Rs 8,000 being remitted.
Advocate RP Remesan, representing the hospital, defended the treatment provided as compliant with standard medical procedures and confirmed that the total bill had been submitted to the TPA, which approved Rs 38,800 as the admissible claim. He noted that the complainant later submitted a fresh claim for the remaining Rs 8,000, which was reprocessed in the interest of fair resolution. No representative appeared on behalf of the TPA.
Advocate P P Venu, representing the insurance firm, argued that the TPA had settled the claim according to the scheme’s package rates and that no further enhancement was feasible. He asserted that the maximum reimbursement allowable for the treatment was Rs 46,800, thus the complainant was not entitled to any additional amount from the insurer.
The commission concluded that the actions of the insurance provider inflicted considerable mental stress and financial hardship on the complainant, holding both the TPA and the insurer accountable for addressing his grievances.
In light of this, the commission directed the insurance company to disburse Rs 66,263 to the complainant, in addition to Rs 13,000 for mental distress and Rs 7,000 to cover litigation costs.
This decision underscores the responsibility of insurance companies to thoroughly process patient claims and highlights the necessity of addressing consumer concerns to avoid unnecessary complications.
Individuals experiencing consumer-related issues may reach out to their local consumer helpline or the National Consumer Helpline at 1915 for assistance (Kerala: 1800-425-1550).
In other recent cases, AIIMS Rishikesh was ordered to pay Rs 60,000 for incorrectly labeling a man as HIV positive, while a dentist was mandated to compensate a woman Rs 3.15 lakh for providing defective dentures costing Rs 2.45 lakh. Additionally, nearly 600,000 cases remain pending in consumer commissions, with over 860 positions unfilled, according to the Centre.
