The District Consumers’ Grievances Redressal Forum has fined an insurance company for denying the mediclaim provision despite the insured party being fully eligible for it.

The Forum, in its final order passed on Aug. 3, 2013, has directed the company to pay Rs. 4,814.30 as the balance amount of hospital bill, Rs. 5,000 as compensation to the complainant for mental torture and Rs. 2,000 for the expenses incurred on the case proceedings within a period of two months, failing which an interest of 9% will be charged on the total amount of Rs. 11,814.30. The complainant also has the option of lodging a criminal case against the insurance company under Column 27 of the Consumers’ Protection Act.

The complainant, S.S. Padmaraj, 55, a businessman residing in Lakshmipuram in city, had availed a Mediclaim insurance policy 26 years ago from United India Insurance Company Limited, Direct Agents Branch, Mysore covering the lives of the policy holder, his wife and daughter. Under the said insurance cover, the insured person, his wife and daughter were indemnified against the medical charges that they would have incurred as a result of suffering of illness or injury during the policy period.

Padmaraj has been renewing the policy for the past 26 years without any break, the total sum accruing to over Rs. 2.60 lakh, according to his advocate H. Kumar, who argued in favour of Padmaraj in the Consumers’ Forum, who added that this was the first claim made by the insured for a paltry sum of Rs. 4,814.30, which is very well within the inner limit of the policy (less than 25% of the sum assured or the actual amount of expenses, whichever is lesser).

Padmaraj’s wife underwent a surgery at a private hospital during June 2012, for which the expenses incurred were Rs. 48,814.30. The insurance company had appointed Bangalore-based Medsave Healthcare Private Limited as the Third Party Administrators (TPA) for processing and settling of mediclaims on commission basis.

Advocate Kumar said that this TPA, without the knowledge of the insured, got in touch with the hospital authorities and settled the bill for Rs. 44,000 only (cash-less service was availed by the patient) as ‘global payment’, while the balance amount of Rs. 4,814.30 was to be footed by the insured.

When the insured furnished the bill to the insurance company seeking reimbursement of the hospital bill, the insurers are said to have given a callous response saying that the hospital had accepted the global payment paid by the TPA as the full and final settlement of the claim.

Advocate Kumar said that when Padmaraj warned of legal action against the insurance company, the company’s agents are said to have told him that it would be a futile exercise to recover a paltry sum of Rs. 4,814.30 as the litigation would incur an expense of at least Rs. 10,000.

Padmaraj issued a legal notice to the insurance company through his advocate, but there was no response, which prompted Padmaraj to approach the Consumers’ Forum for justice on Nov. 21, 2012. The Forum, after hearing the case for a period of over eight months, found the insurance company guilty and ordered for reimbursing the complainant.

Kumar said that Padmaraj also made another claim with the same insurance company for treatment availed at JSS Ayurvedic Hospital, for a bill of Rs. 34,000. However, his claim was not settled either by the insurance company or the TPA for over four months, said Kumar, adding that Padmaraj then lodged a complaint with the Customer Grievance Cell, Insurance Regulatory and Development Authority (IRDA) and the Ombudsman, following which his claim was settled without resorting to any legal measures.

Courtesy : Star Of Mysore