Covid claim denied over ‘fake’ documents, man wins Rs 2.5 lakh from health insurer

Underscoring that insurers are expected to demonstrate a high degree of fairness and good faith while dealing with health insurance claims, a Haryana district consumer commission has directed Star Health and Allied Insurance Co Ltd to pay the claim amount of Rs 2.50 lakh to a man under its Corona Rakshak Policy.

Observing that branding genuine medical documents as fake without conclusive proof and arbitrary repudiation of valid insurance claims strikes at the very object of mediclaim insurance, a bench of presiding member Manjit Singh Naryal of the Charkhi Dadri district consumer commission also ordered the company to pay Rs 10,000 as compensation and Rs 10,000 as litigation cost.

“Insurance companies are expected to act with utmost fairness and good faith while dealing with health insurance claims, especially during the COVID-19 pandemic, situations affecting public health and human lives. In the present case, despite the existence of an authentic RTPCR report, hospitalisation records, and corroborative claim settlement by another insurer, the opposite parties chose to repudiate the claim on speculative and unsubstantiated allegations,” the commission’s order dated June 3 held.

Callous approach: Forum

This commission observed that if arbitrary repudiations are permitted unchecked, the very confidence of the public in insurance mechanisms would stand eroded.

Such conduct reflects a callous and insensitive approach intended to unjustly deny legitimate claims of consumers.

This is a fit case for imposing punitive damages and exemplary costs so as to deter the recurrence of such unfair practices by insurance companies in the future.

‘Bald allegations, no credible rebuttal’

The complainant has successfully proved on record that he was diagnosed with Covid-19 during the subsistence of the insurance policy.

The opposite parties (Star Health) have failed to produce any expert evidence or any communication from the laboratory authority disputing the genuineness of the RTPCR report for Covid-19 diagnosis.

Mere bald allegations of fake documentation without any cogent rebuttal cannot dislodge a duly issued pathology report from an authorised laboratory.

The Corona Rakshak Policy admittedly provides benefit coverage in case of continuous hospitalisation for a minimum period of 72 hours due to Covid-19.

The complainant has placed on record the discharge summary and medical record issued by the hospital, showing admission and discharge, thereby clearly establishing continuous hospitalisation for more than the mandatory 72 hours.

Mere observations that papers were written in similar handwriting or that infrastructure was inadequate cannot by themselves prove fraud or fabrication.

The repudiation of the claim by the opposite parties is primarily based upon suspicion, assumptions and conjectures arising out of the investigator’s report.

However, it is a settled principle of law that suspicion, however strong, cannot take the place of legal proof.

The opposite parties have failed to produce any documentary evidence from any competent statutory authority declaring Gemini Heart Care Hospital to be fake, unauthorised or illegally functioning.

Corona Rakshak policy, aftermath

The complainant obtained a Corona Rakshak Policy from Star Health and Allied Insurance Co Ltd for a sum insured of Rs 2.50 lakh for the relevant policy period, after paying the requisite premium and fulfilling all formalities within the jurisdiction of Charkhi Dadri district.

During the subsistence of the said policy, on developing symptoms of Covid-19, the complainant got himself tested from a government-authorised diagnostic centre, i.e. Dr Lal Path Labs, where his RTPCR test report showed that he was Covid-positive.

Thereafter, the complainant was admitted to Gemini Heart Care Hospital in Punjab’s Zirakpur for Covid-19 treatment and remained hospitalised, completing more than the mandatory 72 hours of hospitalisation as required under the terms and conditions of the policy.

The complainant duly incurred medical expenses and also received treatment under a health insurance scheme, and thereafter lodged his genuine claim with the opposite party by submitting all necessary documents, including RTPCR report, hospital records, discharge summary and other requisite papers strictly in compliance with the policy conditions.

Story continues below this ad

Claim denied over ‘fake’ documents

It was further submitted that the claim of the complainant was liable to be settled within the stipulated period after submission of all necessary documents, as per the terms and conditions of the policy.

However, according to the complainant, the opposite parties, after an inordinate and unexplained delay, arbitrarily and illegally repudiated the genuine claim of the complainant vide repudiation letter, on wholly false, baseless and preposterous allegations of misrepresentation of facts and submission of fake documents, merely with a mala fide intention to deny the legitimate claim amount.

‘Nexus between insured, hospital’

Star Health Allied Insurance Co Limited filed a written statement and raised preliminary objections, inter alia, that the present complaint is not maintainable, there is no deficiency in service on their part, the complainant has no locus standi or cause of action, and that the complaint is based on false and fabricated facts and suppression of material facts.

The insured argued that the claim about hospitalisation from February 13, 2023, to February 19, 2023, at Gemini Heart Care Hospital was repudiated on account of serious discrepancies such as indoor patient records being written in a single handwriting, bills issued without GST, operation of two hospitals in the same premises with the same doctor and nursing staff, inadequate hospital infrastructure, etc.

Story continues below this ad

It also alleged doubtful medical documentation and an apparent nexus between the insured and hospital, along with delay in intimation beyond the stipulated period as per policy conditions.

Significance

This judgment is significant because it protects consumers from arbitrary claim repudiations based on mere suspicion rather than legal proof. It establishes that technical delays cannot defeat substantive rights. Furthermore, it affirms that benefit-based policies must be honoured once eligibility, like Covid-positivity and hospitalisation, is established.

Consumers facing similar grievances may contact the consumer helpline in their respective states (Haryana contact: 1800-180-2087) or dial the National Consumer Helpline at 1915 for assistance.