“The OP (insurance company) is directed to pay Rs 1,65,266 to the complainant along with interest @9% p.a. from the date of filing the complaint along with compensation of Rs 20,000 and litigation charges of Rs 10,000,” the June 1 order read. 

A visit, hospital bills, litigation 

• The complainant stated in the complaint that he was having a family policy including himself and his wife, which was effective from April 1, 2020 to March 2021, having an insured declared value (IDV) of Rs 3 lakh. 
• The complainant added that his wife had to visit their native place at Bhubaneswar, where she fell ill and was admitted to the hospital on account of a certain emergency on June 20, 2020, where she was discharged four days later as she was not able to recover.
• Two days later, as her condition deteriorated, she was admitted to another hospital, where she remained until July 3, 2020.
• However, even after her discharge, she was allegedly not able to recover, and ultimately she died on July 17, 2020. 
• The two hospitals raised bills totalling Rs 3.08 lakh, against which the insurer reimbursed only Rs 91,158, leaving a substantial portion of the claim unpaid.
• It was further added that the complainant approached the insurance company numerous times, but they did not pay the remaining amount.
• Aggrieved by the same, the complainant moved the consumer commission seeking directions that the insurance company be held liable for deficiency in service.
• The man sought direction for the insurance company to pay Rs 2.08 lakh to the complainant along with compensation towards mental agony and harassment of Rs 2 lakh and litigation charges. 
• The complainant was represented by advocate Ramesh Chandra.

Insurance company’s defence 

Representing the National Insurance Co Ltd, advocate Shoumik Mazumdar submitted that the complaint case as filed is not maintainable as there is no deficiency in rejecting the claim. 

The insurer argued that the claim was settled in accordance with the policy terms and that only Rs 91,198 was payable, with the remaining amount deducted under the “reasonable and customary charges” clause and the applicable preferred provider network (PPN) rates.

It was further submitted that since the complainant opted for a non-PPN hospital for admission, although the PPN hospital was available in that vicinity in Orissa, deductions have been made by the insurance company as per the policy, and since the deductions have been made as per rules, there cannot be any deficiency on their part.  

Significance of ruling

This ruling underscores that health insurers cannot make substantial deductions from a mediclaim merely by invoking broad expressions such as “reasonable and customary charges” without clearly explaining and justifying how those deductions were calculated. 

The order reinforces the principle that policyholders are entitled to transparency in claim settlements and that insurers may be held liable for deficiency in service where claim reductions are not adequately supported.

Consumer helpline number of respective state and national consumer commission: For consumer-related grievances, individuals may contact the consumer helpline in their respective states (Helpline: 1800-11-4000) or call the National Consumer Helpline at 1915 for assistance.