Cashless approval cannot be withdrawn at discharge: Kalaburagi District Consumer Disputes Redressal Commission

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Advocate Vaijanath S. Zalaki handing over the ₹2.39 lakh insurance claim amount to the beneficiaries at their residence in Kalaburagi on Friday (September 11). | Photo Credit: ARUN KULKARNI

In a significant order in a health insurance claim dispute, the Kalaburagi District Consumer Disputes Redressal Commission has held that an insurance company cannot withdraw the approval for cashless treatment at the time of discharge from the hospital and reject the claim on the ground of a waiting period.

The commission has directed Niva Bupa Health Insurance Company to pay a total of ₹2,39,574 to the complainants, covering the medical expenses incurred for treatment, compensation for deficiency in service and mental agony, and litigation costs.

The order was recently passed by the commission, presided over by in-charge Commissioner Malathi Guranna and member M. Lokesh. The complaint was filed by Shali Nazir and his son Shali Khader Basha against Niva Bupa Health Insurance Company and Policybazaar Insurance Brokers Pvt. Ltd.

According to the case, Shali Nazir had purchased a family floater health insurance policy from the insurance company through Policybazaar by paying an annual premium of ₹37,460. The policy carried a sum insured of ₹10 lakh and covered the complainant, his wife and son. The original policy was valid from November 11, 2022, to November 17, 2023, and was subsequently renewed for the period from November 18, 2023, to November 17, 2024.

During the renewed policy period, the second complainant developed sudden pain in his right knee. He underwent an examination at Spectrum Diagnostics and Healthcare Centre in Bengaluru on April 3, 2024, and was subsequently examined at Apollo Hospital, Bengaluru, on June 15, 2024. Doctors advised surgery.

The complainants approached the insurance company through the hospital seeking approval for cashless treatment. The insurer initially approved the cashless treatment. However, at the time of discharge, the company abruptly withdrew the approval through an email and rejected the claim, citing Clause 6.2(f) of the policy and stating that the 24-month waiting period applicable to the treatment had not been completed.

As a result, the complainants had to bear ₹2,24,574 towards the medical expenses at Apollo Hospital. Alleging deficiency in service on the part of the insurer, they approached the district consumer commission through advocate Vaijanath S. Zalaki seeking relief.

After examining the period of the original policy and its renewal, the date of treatment and the documents produced by the insurance company, the commission held that the insurer’s rejection of the claim under Clause 6.2(f) was not justified.