An insurance provider's unexplained failure to process or repudiate valid medical claims, combined with a failure to file a written version to contest assertions, constitutes a deficiency in service warranting reimbursement of medical expenses and compensation.

Headnote:(A) Consumer Protection Act, 1986 - Section 17 - Health insurance - Reimbursement of medical expenses - Deficiency in service - Inaction of insurance company and TPA to process claims constitutes deficiency - Pre-existing disease argument rejected for lack of evidence - Failure to file written version precludes raising factual disputes before the Commission. (Paras 6, 7, 8)

Facts of the case:
The complainants, who held a group 'Arogyadan' health insurance policy, sought reimbursement for medical expenses incurred for renal cell carcinoma treatment amounting to over Rs.32 Lakhs. Despite submitting necessary documents, the insurance company and the Third Party Administrator failed to honor the claims or provide any communication regarding their status, prompting the complaint for deficiency in service.

Findings of Court:
The Commission held that the insurance company and TPA failed to process the legitimate claims without any valid justification. Since they did not file a written version, they could not raise factual defenses like pre-existing disease. Consequently, the opposite parties were found jointly and severally liable to reimburse the expenses and pay compensation for mental agony.

Issues: Whether there was deficiency in service by the insurance provider, and whether the complainant is entitled to reimbursement of treatment expenses and compensation.

Ratio Decidendi: An insurance provider's failure to respond to or process legitimate medical claims during the subsistence of a valid policy, coupled with a failure to contest the complaint via a written version, constitutes a clear deficiency in service rendering the insurer liable for reimbursement and damages.

Result: Complaint allowed against the insurance company and TPA; dismissed against the bank.

ORDER

SRI. AJITH KUMAR D. : JUDICIAL MEMBER

This is a complaint filed under Section 17 of the Consumer Protection Act, 1986.

The averments in the complaint in brief are as follows:

The complainants are two doctors, who had availed a group health insurance policy by name and style “Arogyadan Policy” from the first and second opposite parties. The third opposite party is the Third Party Administrator of the first and second opposite parties. The policy was offered by the fourth opposite party, the bank to their account holders. The complainants had availed treatment for renal carcinoma during the subsistence of the policy from 09.06.2018 to 08.06.2019. The complainants have joined the policy w.e.f. 08.03.2008. The policy has been in continuous force ever since. The policy benefit is Rs.5,00,000/-(Rupees Five Lakhs only) plus top of Rs.3,00,000/-(Rupees Three Lakhs only) totaling to Rs.8,00,000/-(Rupees Eight Lakhs only) per annum. Both the complainants remitted premium of Rs.15,743/-(Rupees Fifteen Thousand Seven Hundred and Forty Three only) per annum. In November 2009, the first complainant had to undergo kidney operation and her right kidney was removed by Right Radical Nephrectomy. The first policy has been in continuous force for the past ten plus years. The complainants are remitting a total amount of Rs.39,340/-(Rupees Thirty Nine Thousand Three Hundred and Forty only) as premium for availing a total coverage of Rupees Twenty Three Lakhs per annum towards health care.

In August 2018, when the complainants underwent an annual medical checkup, two tumours were detected in the left kidney of the first complainant. The manifestation of the disease occurred after the inception of the base policy w.e.f. 03.02.2017. Therefore, the complainants were covered by the benefits of the policy up to Rupees Twenty Three Lakhs.

On 04.09.2018, the first complainant got admitted at Amrita Hospital, Ernakulam which is not a network covered hospital of the opposite parties’ cashless access. So, the complainants are entitled only for reimbursement on submission of the claim form post-treatment. Since it was an emergency, the complainant had decided to spend the amount from their own pocket and avail treatment. The first complainant had undergone treatment for her ailments from AIMS Hospital and RCC and underwent immunotherapy with combined chemotherapy. The details of the treatment underwent by the first complainant are shown below:

Sl. No.	Date of admission	Date of discharge	Date of claim	Claim No. with amount claimed	Name of the Hospital with nature and description of treatment	Status of claim
1.	04.09.2018	11.09.2018	14.09.2018	223590 Rs.3,74,566/-	AIMS partial nephroctomy of the left kidney. It involved a five stage laparoscopic procedure with one step assisted robotic procedure	only Rs.26,400/- allowed.
2.	21.11.2018	24.11.2018	24.11.2018	231390 Rs.91,152/-	AIMS PET scan revealing metabolically active primary malignancy of left kidney and paraaortic lymph node metastasis	not honoured till date
3.	27.11.2018	27.11.2018	29.11.2018	231547 Rs.6,81,454	KIMS first stage of immunotherapy combined chemotherapy	not honoured till date
4.	16.12.2018	16.12.2018	16.12.2018	Rs.2,40,000/-	KIMS first stage of immunotherapy combined chemotherapy	not honoured till date
5.	08.01.2019	08.01.2019	24.01.2019	246135 Rs.1,87,120/-	RCC third stage of immunotherapy combined chemotherapy	not honoured till date
6.	30.01.2019	30.01.2019	30.01.2019	Rs.3,09,230/-	RCC fourth stage of immunotherapy combined chemotherapy	not honoured till date
7.	22.02.2019	22.02.2019	08.03.2019	249398 Rs.4,30,305/-	RCC fifth stage of immunotherapy combined chemotherapy	not honoured till date
8.	15.03.2019	15.03.2019	03.04.2019	253517 Rs.4,30,305/-	RCC third stage of immunotherapy combined chemotherapy	not honoured till date
9.	06.04.2019	06.04.2019	06.04.2019	Rs.1,21,275/-	VSSC Polyclinic seventh stage of immunotherapy combined chemotherapy	not honoured till date

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2026 Supreme(Online)(SCDRC) 3142

STATE CONSUMER DISPUTES REDRESSAL COMMISSIONB. Sudheendra Kumar, President, Ajith Kumar D., Judicial Member, K.R. Radhakrishnan, MemberChandralekha P. Nair – AppellantVersusUnited India Insurance Co Ltd – RespondentCONSUMER COMPLAINT NO. SC/32/CC/121/2019

An insurance provider's unexplained failure to process or repudiate valid medical claims, combined with a failure to file a written version to contest assertions, constitutes a deficiency in service warranting reimbursement of medical expenses and compensation.

STATE CONSUMER DISPUTES REDRESSAL COMMISSION
B. Sudheendra Kumar, President, Ajith Kumar D., Judicial Member, K.R. Radhakrishnan, Member
Chandralekha P. Nair – Appellant
Versus
United India Insurance Co Ltd – Respondent
CONSUMER COMPLAINT NO. SC/32/CC/121/2019