Star Health Insurance can’t reject claim

In a caustic remark against the Star Health and Allied Insurance Company Ltd, the District Consumer Forum at Vijayawada stated in one of its landmark judgement that it was not for the insurance company to decide whether a patient required hospitalisation or a particular treatment procedure should be offered to the patient. It directed the insurance firm to pay the claim to the insured person with interest from the date of rejection of the claim.

A couple from Vijayawada, P Prabhakar Rao and his wife Suseela, subscribed to a health insurance policy paying an annual premium of Rs 8,592 to Star Health and Allied Insurance Company Ltd. Subsequently, Suseela developed rheumatoid arthritis and underwent treatment in Manipal Hospital, Tadepalli, for infusion of chemotherapy–RITUXIMAB—for two days. She was admitted as an inpatient as per expert medical advice. She incurred an expenditure of Rs 85,994 for the treatment.

However, when she made a claim for the amount, the insurance firm repudiated the claim on the ground that RITUXIMAB could be administered as outpatient treatment.

Suseela preferred to file a consumer complaint in the Vijayawada District Consumers Forum through Consumers’ Guidance society headed by its secretary Dr Ch Divakar Babu seeking direction to the Star Health and Allied Insurance Company Ltd to settle the insurance claim.

In its affidavit, Star Health and Allied Insurance Company Ltd stated that the RITUXIMAB infusion could be done as day care procedure which was outside the scope of policy. It also stated that the patient was suffering from rheumatoid arthritis for a number of years prior to inception of policy. Since it was a pre-existing disease, the insurance firm was not liable to pay the amount claimed.

The insurance firm also stated that the team of the firm re-examined the claim records and pointed out that RITUXIMAB diagnosis other than chemotherapy was not an FDA-approved diagnosis and the injection was given as day care procedure. It did not warrant hospitalisation and there the treatment was not admissible as per the policy, it stated and added that the day care procedure was not covered by the policy.

After hearing the arguments of both the parties, the District Consumer Forum at Vijayawada opined that the insurance firm, though, had taken the plea of pre-existing disease, it has not clarified if repudiation was on the ground of taking treatment for pre-existing disease not covered by any specific clause of the policy. On the other hand, there was absolutely no material available in the record to show that by the date of taking the policy the complainant was suffering from rheumatoid arthritis or its symptoms. It also pointed out that the policy was taken in October, 2010 while the treatment was taken in September 2011 nearly eleven months after subscribing to the policy. The forum observed that there was no rule and the opposite party had not placed convincing medical literature to show that when the patient was suffering from rheumatoid arthritis and first cycle of chemotherapy was administered, the patient must have experienced its symptoms for more than eleven months or one year prior to the first cycle of chemotherapy. For diagnosis of rheumatoid arthritis, the minimum period required is six weeks.

The insurance firm stated that expenses on hospitalisation for minimum period of 24 hours were admissible. However, that limit would not apply to dialysis, chemotherapy and rheumatoid arthritis etc, the forum observed. It was also pointed out that the insurance firm did not deny anywhere RITUXIMAB was not part of chemotherapy. So even if administration of RITUXIMAB was considered as day care procedure, the insurance firm was bound to accept the claim, the forum observed.

The forum directed the insurance firm to pay the bill amount of Rs 85, 994 with interest from the date of rejection and costs of Rs 2,000. However, the forum was not inclined to award further compensation.