Insurer must pay for specified OPD treatments

Anila Gupta had purchased a health insurance policy called Arogya Raksha. This policy was issued by the Chennai Divisional Office of United India Insurance in arrangement with Indian Bank. The premium for the policy was routed through Indian Bank, Nariman Point Branch, Mumbai, with which Anila had an account.

The policy, which covered both Anila and her husband Binoy, was purchased in 2009. It was renewed over the years without break. The policy for the period December 1, 2015 to November 30, 2016 had a coverage limit of Rs 5 lakh. Binoy fell ill during the tenure of the policy. He underwent oesophageal manometry on March 18 and 19, 2016 at Jaslok Hospital as an outdoor patient, for which he incurred a total expense of Rs 29,610.

When reimbursement of the expense was claimed, Med Vidal Health, the third-party administrator (TPA) appointed by United India Insurance, sent a letter on June 2, 2016 demanding the discharge card and other original reports. Although these documents were submitted, both the TPA and United India Insurance did not bother to respond for nearly six months. The claim was ultimately rejected on November 30, 2016 by the TPA.

Anila then approached the Consumer Commission for South Mumbai District with a joint complaint against the bank and the insurer. Since no claim was made against the bank, it did not bother to contest the complaint. United India Insurance contested the case. It raised a legal objection regarding the jurisdiction of the South Mumbai Consumer Commission to consider the dispute as the policy had been issued by the Chennai office. It also contended that the complaint was time-barred.

On merits, the insurer contended that the terms of the policy had been communicated, which made it clear that the policy only covered treatment as an in-patient, and excluded expenses for treatment taken as an out-patient. The company contended that the claim was not payable as Binoy had not been hospitalised.

The District Commission observed there was an agreement between Indian Bank and United India Insurance for issuance of the policy. The premium amounting to Rs 8,141 was paid by the Nariman Point Branch of Indian Bank with which Anila had an account. Since the premium collection was done within the territorial jurisdiction of the Commission, it held the complaint to be maintainable.

On limitation, the Commission observed that the claim was repudiated on November 30, 2016 while the complaint had been filed on January 19, 2017, so it was well within the limitation period.

On the question of treatment taken as an out-patient, the Commission observed that even though the general terms of the policy provided for hospitalisation, there was a specific provision that this general provision would not apply to certain ailments and conditions. The policy specifically mentioned treatment for oesophageal manometry as one of the exceptions for which the claim would be covered even if taken as an out-patient without hospitalisation. Hence the Commission held that the repudiation was not justified and the claim would be payable.

Accordingly, by its order of May 25, 2022 delivered by D.S. Paradkar for the bench along with presiding member Sneha Mhatra, United India Insurance was indicted for gross deficiency in service and unfair trade practice. The Commission ordered the insurer to pay the entire claim of Rs 29,610 together with 8 per cent interest from the date of repudiation. It also awarded Rs 10,000 towards compensation and Rs 5,000 towards litigation cost.

The writer is a consumer activist