Widower wins Rs 1.95 lakh after insurer cut dead wife’s mediclaim over ‘customary charges’

Partially approved health insurance

• The complainant filed a complaint that he had a family policy including himself and his wife, which was effective from April 1, 2020 to March 31, 2021, having an insured declared value (IDV) of Rs 3 lakh. 
• The complainant and his wife had to visit their native place at Bhubneshwar, where his wife fell ill and was admitted to the hospital on account of an emergency on June 20, 2020, from where she was discharged on June 24, 2020, as she was not able to recover and her health was deteriorating.
• She was admitted to another hospital on June 24, 2020, itself, where she remained till July 3, 2020; however, even after her discharge, she was not able to recover, and ultimately she expired on July 17, 2020. 
• The hospital authorities (both hospitals) raised a bill of Rs 3.8 lakh for which the claim was made, but National Insurance Co. Ltd. has only reimbursed an amount of Rs 91,158 and has not reimbursed Rs 2.8 lakh out of Rs 3 lakh IDV.
• The complainant approached the insurance company numerous times, but it did not pay the remaining amount, and as such he has filed the present complaint case.
• The complainant had sought directions that the insurance company be held liable for deficiency in service and be directed to pay Rs 2.8 lakh to the complainant with interest at 24 per cent per annum along with compensation towards mental agony and harassment of Rs 2 lakh and litigation charges. 

Company’s contentions 

The National Insurance Company Ltd submitted that the complaint was not maintainable as there was no deficiency in rejecting the claim, as it was as per law, and the remaining amount was deducted on account of ‘reasonable and customary charges’ for the procedure involved, as also as per the agreed rates under Preferred Provider Network (PPN) Policy.  

It was submitted that a clause of the policy’s terms and conditions stated that reasonable and customary charges have to be deducted, which are the standard charges for the specific service provided.

 It was contended that the amounts are consistent with the prevailing charges in the geographical area for identical or similar services and, as per the clause, the amount which was admissible to the complainant had already been given and therefore the complaint of the complainant be dismissed.

The counsel said that as far as merits are concerned, the contents of preliminary objections were reiterated and the fact that the complainant and his wife had a policy, she was admitted in two hospitals where from a bill of Rs 3.8 lakh was raised, and Rs 91,151  was reimbursed are not denied, and it was prayed that the complaint case of the complainant be dismissed. 

‘Can’t invoke reasonable and customary charges’

After enquiring, the commission noted that apart from Room Rent charges, all other expenses, i.e. towards the investigation, medicines, consumables and pre and post-hospitalisation, are part and parcel of the treatment, and there cannot be any reasonable nexus with the proportionate deduction except to the Room taken by the complainant.  

The commission was of the view that as far as investigations/diagnoses, pre and post-medical charges, and pre and post-hospitalisation charges within the permissible period or monitoring charges cannot be deducted by invoking the clause ‘reasonable and customary’ charges, and amounts to deficiency in service.

The commission noted that an amount of Rs 31,749 was given as a discount to the complainant, which the complainant has not mentioned, and had not spent Rs 3.3 lakh; rather, he had spent an amount of Rs 2.72 lakh, and out of that Rs 91,151 have already been paid. 

The commission directed the insurance company to pay Rs 1.65 lakh to the complainant with interest at 9 per cent per annum from the date of complaint, along with compensation of Rs 20,000 and litigation charges of Rs 10,000 as an award.

The order should be complied with within 30 days of the judgment, failing which the insurance company should pay 12 per cent interest per annum on the entire amount from the date of complaint till the date of realisation, the commission said.

Consumer takeaway from case

The ruling underscores that a consumer cannot be deprived of their right to claim when they have produced all the documents in favour of their case, and that an insurance company cannot evade their responsibility by quoting the investigation, medicines, consumables and pre and post-hospitalisation expenses as ‘reasonable and customary charges’. 

It highlights that investigations, diagnoses, pre and post-medical charges within the permissible period or monitoring charges, cannot be deducted by invoking the clause ‘reasonable and customary’ charges. 

Aggrieved consumers may contact the consumer helpline in their respective states (Kerala helpline: 1800-425-1550  ) or call the National Consumer Helpline at 1915 for assistance.