2010 Supreme(Guj) 167
HIGH COURT OF GUJARAT
HONOURABLE THE CHIEF JUSTICE MR. S. J. MUKHOPADHAYA, HONOURABLE MR. JUSTICE AKIL KURESHI
LIFECARE INSTITUTE OF MEDICAL SCIENCE AND RESEARCH PVT LTD
Versus
UNITED INDIA INSURANCE CO LTD
SPECIAL CIVIL APPLICATION No. 4717 of 2010
Decided On : MAY 14, 2010
Headnote:
Medical claim - Petitions filed on behalf of hospitals who have been, by a common order produced at Annexure A to Special Civil Application, declared as hospitals in whose cases no cashless or reimbursement claim will be entertained by the respondent Insurance Companies - Held, The impugned order at Annexure A in so far as the petitioners are concerned is quashed and set aside - Having done that, we at the same time cannot shut our eyes to the rising tendency of medical malpractices in insurance claims - It will, therefore, be open for the respondents to take a fresh decision after giving an opportunity to the petitioners to meet with the allegations of irregularities and malpractices against them - For the said purpose, if the respondents so desire to proceed further, show cause notice shall be issued to the concerned hospitals within a period of two weeks from today and after considering the representations of the petitioners, if made, pass appropriate order - If such show cause notices are issued within the time permitted, until final decision as mentioned above is taken, the petitioners shall not insist on acceptance of mediclaims of cashless or reimbursement for the treatment to the patients given, which shall be governed by the ultimate outcome of such exercise - However, it is clarified that for the treatment to the patients given prior, the respondents Insurance Companies shall continue to process the mediclaim and pay the same as found admissible under the Rules. It will also be open for the Insurance Companies, if so found appropriate, to require the petitioners to take such remedial measures as found necessary - Petitions are disposed of.
( 1 ) THIS group of petitions involve identical questions of facts and law. They have been heard together and are being disposed of by this common judgment.
( 2 ) ALL these petitions are filed on behalf of hospitals who have been, by a common order produced at Annexure A to Special Civil Application No. 3983 of 2010, declared as hospitals in whose cases with effect from 1. 4. 10 no cashless or reimbursement claim will be entertained by the respondent Insurance Companies. ( 3 ) FACTS as arising in SCA No. 3983 of 2010 may be noticed. Petitioner is a hospital located in the city of Ahmedabad providing treatment for various kinds of ailments and diseases through number of doctors attached to the hospital. Until Annexure A was passed, the petitioner hospital was recognized by the respondents Insurance Companies for cashless as well as reimbursement of medi-claims. However, on the ground of certain alleged irregularities and malpractices detected in the insurance claims of the patients treated by the said hospital along with 15 other hospitals, the petitioner hospital was included in the list of hospitals in whose cases with effect from 1. 4. 10, no cashless or reimbursement claim will be entertained.
( 4 ) IT is not in dispute that before passing the said order, no show cause notice or any form of hearing was granted to the petitioner.
( 5 ) FACTS are more or less similar in all the cases.
( 6 ) IN response to the notice issued by us, the Insurance Companies have appeared and filed their replies. In the affidavit in reply dated 7th February 2010, filed on behalf of respondent No. 4, New India Assurance Company Ltd. , it is stated, inter alia, that while processing the claims of settlement of the patients, Third Party Administrator (TPA for short) detected certain irregularities and unfair practices committed by the petitioner. It is stated that there are discrepancies in the records. Patients were shown to have been admitted in the hospital when they were not and dates of discharge also in some cases did not tally. Upon verification, some of the doctors even withdrew the claims. Some individual cases of discrepancies have also been highlighted in the reply. Similar replies have been filed by other Insurance Companies also.
( 7 ) FURTHER affidavit in reply came to be filed on 4th May 2010 in which, it is inter alia, stated that the petitioner hospital and other similar hospitals have knowledge about the unfair practices and irregularities in mediclaim billing. These irregularities were brought to the notice of the hospitals, despite which such irregularities continued. Along with the said affidavit, minutes of the meeting dated 15th October 2009 of the Officers of the Insurance Companies and TPAs has been produced. The minutes records that 'during the interaction and discussion the following hospitals were identified unanimously and decided to issue a notices to all such identified hospitals involved either in unfair practices or in disproposted bills of mediclaim'. The respondents have also produced office note dated 16th March 2010 along with said affidavit in which it is recorded that in the previous meeting, it was decided to issue notice of dispanalment of the hospitals. However, in order to avoid litigation, it is decided to keep these hospitals 'on declined list of hospitals'.
( 8 ) FROM the above, it can be seen that by the impugned order, the petitioners-hospitals have been dropped with effect from 1. 4. 10 from the facilities of cashless and reimbursement claims. Admittedly, no show cause notice or any other form of hearing is granted to the petitioners before such decision was taken by the respondents.
( 9 ) THE respondents are nationalized Insurance Companies. They are held to be 'state' within the meaning of Article 12 of the Constitution. Their actions therefore must conform to the requirements of fairness flowing from Article 14 of the Constitution of India. It cannot be denied that the impugned decis