The district consumer commission has ruled that an insurance company cannot dictate the line or method of medical treatment, emphasizing that medical decisions must be left to qualified doctors. The order came while hearing a complaint against Star Health and Allied Insurance, which had rejected a Covid-related hospitalisation claim. The insurer has now been directed to pay Rs 49,423, along with 6% annual interest and Rs 2,000 as litigation cost, within 30 days, according to a TOI report.
The case dates back to September 1, 2022, when Nitu Nagar, a resident of Dadri, filed a complaint before the District Consumer Disputes Redressal Commission (DCDRC). Her husband, Ajay Nagar, had been covered under Star Health’s Family Health Optima Insurance Policy since 2018, renewed annually without any break.
In January 2022, during the fourth year of the policy, Ajay developed high fever and breathing difficulties. He was admitted to Yatharth Hospital, Greater Noida, as the family believed immediate medical attention was necessary. The insurer was informed before his admission, and the family was assured that the cashless claim would be approved soon.
However, Star Health later refused to clear the bills, arguing that Ajay had asymptomatic Covid and could have been treated at home as per government guidelines. With hospital expenses amounting to Rs 49,423, the family paid out of pocket and subsequently applied for reimbursement. When the insurer failed to settle the claim, Nitu issued a legal notice on August 3, 2022, but received no response.
During the proceedings, Star Health defended its stand, stating that the patient’s symptoms—primarily fever and body pain—did not justify hospitalization. The commission disagreed.
In its November 26 order, commission president Anil Kumar Pundir and member Anju Sharma held that an insurer cannot override a doctor’s recommendation.
“If medical experts deem hospitalisation necessary, the insurer cannot insist that treatment be carried out at home,” the panel said.
The commission added that rejecting a claim on the grounds that treatment should have been done in home isolation amounted to deficiency in service.
Star Health has been directed to reimburse the full hospital bill with applicable interest and litigation cost.
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