Application filed at Bombay HC against ‘arbitrary’ rejection of claims of Covid-19 patients by insurance companies

Citing harassment and agony of Covid-19 patients by private hospitals and insurance companies over the settling of hospital bills, advocate Rajesh Inamdar filed an interim application at Bombay High Court seeking investigation into alleged rejection of policyholders’ claims by insurance companies in an arbitrary manner and a direction the latter to process cashless facilities for Covid patients.

In an ongoing Covid-19 related case filed by Nilesh Navlakha, Inamdar filed an interim application based on his personal experience to highlight the problems faced by patients having an insurance policy in settling hospital bills at private hospitals and rejection of claims by the insurance companies.

He prayed to the court to direct the Insurance Regulatory and Development Authority of India (IRDA) to conduct an investigation under the Insurance Act and direct the insurance companies to immediately reimburse all claims of the patients which were “arbitrarily and mischievously rejected”.

“The court should ask IRDA to investigate and file a report as to how many claims were rejected by insurance companies in an arbitrary, frivolous, mechanical and mischievous manner and denied benefits of insurance policy to the policyholders and have taken undue advantage of the pandemic to unjustly enrich themselves,” Inamdar said in his application.

The applicant also requested the court to direct the Pune Municipal Corporation (PMC) to conduct an audit into affairs of all the hospitals and investigate if there is a systematic fraud played by hospitals in connivance with insurance companies to exploit and unjustly enrich themselves by denying the benefits of insurance claims to the policy holders.

Incidentally, the audit of hospital bills of Covid-19 patients in private hospitals in its jurisdiction has been done by PMC and it has reduced a total of Rs 5.03 crore bill of 1,536 patients. In the first week of July, a bill amount of Rs 17.21 lakh was reduced for 188 patients who got treated at private hospitals in the city.

“The insurance companies have been rejecting claims of Covid patients all over the state, citing unnecessary hospital stay on completely arbitrary and frivolous grounds. The companies have been adopting a completely mischievous, unethical and inhumane approach while considering the request for cashless facility of Covid patients over hospital stay by furnishing super-medical advice, over and above the advice rendered by the medical experts, on the necessity of hospitalisation of patients,” he said.

The discretion of placing a patient in-home quarantine or hospitalisation lies solely with the doctors and medical experts examining or screening the patients and not with the insurance companies, the applicant said, adding, patients have been advised hospitalisation based on the previous medical history and co-morbidities after they consulted hospitals or doctors on receipt of Covid-19 positive reports. “However, the claims are unilaterally and mischievously rejected by the insurance companies stating that the patient did not need to go to the hospital, in a brazen display of high-handedness and apathy,” the application read.

The degree of lung infection, comorbidities and age of the patient “are considered for admitting a patient to the hospital and the patient is not in a position to either accept or deny such advice of the doctors to get admitted. The pandemic has shown that private healthcare is unaffordable, public healthcare is weak and insurance is not helping people access healthcare either,” Inamdar added.

Despite instructions from IRDA, the applicant said the Insurance companies have been denying cashless facilities to patients. The process of reimbursement has also become a terrible and tiresome affair, wherein medical refund is available after unfair and unreasonable deductions, which went up to 40% to 50% of the actual bill amount.

“Any medical opinion by the insurance companies to deny the claims contrary to the opinion of the doctors or the hospitals suggesting hospitalisation is entirely untenable, illegal and in denial of the claim of the policyholders clearly amounts to profiteering, extortion and unjust enrichment,” he said.

He added, “In case there is even an inkling of the hospitals’ complicity with the insurance companies to squeeze or extort money by abusing the trust, misery and misfortune of Covid-19 patients, in a racket of sorts to unlawfully extort more and more money, it is imperative that a committee be constituted to inquire into the matter and unearth the truth.”

The court has fixed the hearing on the matter after three weeks.