Delhi

North

CC/137/2023

JAGDEEP SINGH - Complainant(s)

Versus

NEW INDIA ASSURANCE COMPANY LTD - Opp.Party(s)

01 Jan 2024

ORDER

District Consumer Disputes Redressal Commission-I (North District)

[Govt. of NCT of Delhi]

Ground Floor, Court Annexe -2 Building, Tis Hazari Court Complex, Delhi- 110054

 

Consumer Complaint No.137/2023

In the matter of

Jagdeep Singh,

44, Ambika Vihar,

Pashchim Vihar,

New Delhi-110063

 

Works for gain at:-

Prince Transport Co.,

5582, Lahori Gate,

Delhi-110006                                               ...                Complainant

VERSUS

The New India Assurance Company Ltd.

902-905, Hemkunt House,

9th Floor, 6, Rajendra Place,

New Delhi-110008                              ...                Opposite Party No.1.

 

Health Insurance TPA of India Ltd.,

Majestic Omnia Building, 2nd Floor,

A-110, Sector-4, Noida                       ...                Opposite Party No.2.

 

ORDER

01.01.2024

(Divya Jyoti Jaipuriar)

1. The Complainant’s main grievance in this case against M/s New India Assurance Co. Ltd. (OP-1 hereinafter) and M/s Health Insurance India TPA Pvt Ltd. (OP-2 hereinafter), is that they have failed to reimburse the full costs of the medical treatment that the complainant underwent which should be covered under the insurance policy purchased by the complainant. The complainant has asked for reimbursement of an amount of Rs. 2,00,997/- and interest @ 12% PA, along with compensation of Rs 5,00,000/- for mental agony and harassment due to alleged deficiency in services and costs of litigation. As none of the OPs appeared before this Commission despite service, both OPs were proceeded ex-parte.
2. Briefly stated, the facts of the case were that the complainant purchased one New India Floater Mediclaim policy with sum assured of Rs. 5 lakhs from OP-1 for which OP-2 was the Third Party Administrator. The said policy was purchased on 21.07.2016 and the same was renewed every year without any break. The policy was valid during the treatment for which the claim, which is subject matter of this compliant, was filed.
3. The Complainant underwent Laparoscopic Partial Gastrectomy surgery from Fortis Escorts Heart Institute, Delhi (not a party) on 03.07.2022 and was discharged on 09.07.2022, after undergoing surgery. Prior to the admission, the hospital authorities provided an estimate of Rs 2,96,422/- for the surgical procedure. However the final bill at the time of discharge was Rs. 3,94,654/-. The OPs released a pre-authorized amount of Rs 1,97,827/- to the hospital in compliance of the pre-authorization approval letter dated 09.07.2022 issued  by the OPs. After adjusting the pre-authorised amount, the complainant paid a remainder amount of Rs 2,00,997/-. The main grievance of the Complainant is about non-payment of the balance amount.
4. After the discharge of the Complainant, he contacted the OPs through email seeking explanation of payment of reduced amount to the hospital and not the final bill amount. The emails of the Complainant were sent on 18.07.2022, 19.07.2022 and 22.07.2022. In reply, OP-2 communicated through e-mail dated 26.07.2022 that the balance amount was absorbed in the deductions that the Insurance Company had made. These included excess room rent charges, admission charge, diet charge and non-payables. It was also communicated that a sum of Rs. 1,81,075/- has also been deducted under the head of ‘proportionate deduction’. The Complainant alleges that the reasons of the said proportionate deduction were not explained by the OPs. For the sake of convenience, the calculation of payments as made by the OPs, which was communicated through email sent by OP-2 on 26.07.2022 is reproduced here:

Head	Gross Amount	Settled	Deducted	Remarks
Other procedure	8818		8818	Diet, admission, tpa evaluation, documentation
Physiotherapy	6000	6000
Consultations	14022	14022
Consumables	1104		1104	Non-payable
Drugs	6755	6755
Room rent	20000	10000	10000	Excess room rent deducted (Rs. 5000/- per day applicable)
Hospital Package	342125	342125
Proportionate		-181075
Total bill Amount	398824	197827	19922

 

5. Upon repeated inquiry by the complainant, the OPs responded by pointing to clause 3.1 (a) in the policy terms and conditions that state that the insurance company is not liable to pay for additional medical expenses when the room rent, boarding and nursing charges exceed 1% of the sum insured (without cumulative bonus) per day. Since the complainants took a room with higher rent, this amount was deducted as the differential.
6. Through his subsequent e-mails, the complainant has reiterated his demand to the OPs to provide a reasonable and lawful basis for their deductions. In the complaint he argues that proportionate deductions made on the basis of excess room rent are wrongful since he was not informed of such provisions while purchasing the insurance policy. Even when the policy was subsequently renewed, it was done on the same terms of the contract which were agreed upon earlier.
7. It is also alleged by the Complainant that although the OPs were duly informed about the hospitalisation, the pre-authorization was approved only on 09.07.2022, the date of discharge. It is also stated that had the pre-authorisation approval of the reduced amount be communicated prior to admission, the Complainant would have an option of reconsideration of choice.
8. The Complainant also alleges that the proportionate deduction as explained in the email dated 16.07.2022 sent by OP-2 was never explained at the time of purchase of policy or even at the time of renewal of policy. He has also stated that the proportionate deduction of the claim amount is not in conformation of the judgment of Hon’ble National Commission in the matter of New India Assurance vs. A. K. Kariappa (RA No. 766/2011, decided on 02.06.2015). In the said judgment, Hon’ble National Commission , while dealing with proportionate deduction by insurance companies while settling the medical claims has held as under:

“8. … Instead of making a proportionate deduction from the charges paid by the complainant to the hospital it ought to have inquired from the concerned hospital as to what exactly would be the charges payable in case the room rent was Rs.1,000/- per day.  It is quite possible that the said charges would remain same irrespective of whether the room rent is Rs.1,000/- or Rs.2,000/- or even Rs.5,000/- per day.  Another possibility is that the charges would vary with the room rent charged by the hospital, but the variation may not be proportionate for the variation in the room rent, yet another possibility is that the charges would be directly proportionate to the room rent.  Therefore, it would be necessary for the Insurance Company to make an inquiry in this regard from the Hospital and find out what would be the applicable charges for the room to which the insured is entitled under the terms of the policy.  However, since no such exercise was undertaken by the Insurance Company, the deduction made by it except in respect of room rent was not justified.”

9. It is argued by the Complainant that as the OPs have not conducted any investigation or enquiry with the treating hospital while proportionately deducting the claim amount, the proportionate deduction is not justified.
10. Accordingly, the complainant has prayed for a direction to the OPs to release the balance amount of Rs. 2,00,997/- that has been deducted by the insurance company in an arbitrary manner without lawful justification.
11. We have perused the records and pleadings in the matter. It is a fact that the pre-authorization was granted on 09.07.2022, the date of discharge of the Complainant. However the said pre-authorization letter clearly indicates that the request for approval was filed with the OP on 09.07.2022. There is no document on record to suggest that the treatment was communicated to the OPs prior to the admission. This might be possible that the treating hospital, who is usually responsible for furnishing details to the insurance company, might have communicated about the admission at delayed stage. But as the treating hospital is not a party, we cannot examine such aspect and fix any liability on such hospital for possible delayed intimation to the insurance company.
12. On the aspect of proportionate deduction, the judgment of Hon’ble National Commission is very clear. There is no document on records or even communication from the OPs that would suggest that the OPs have conducted any enquiry from the treating hospital about the variation of hospital charges based on category of rooms chosen by the patient. In absence of such enquiry report, the proportionate deduction by the OPs is not justified.
13. At this stage, we would also like to refer to the guidelines issued by Insurance Regulatory and Development Authority of India (IRDAI). IRDAI had issued “Modified Guidelines on Product Filing in Health Insurance Business Norms on Proportionate Deductions” dated 11th June, 2020. In the said guidelines, it is provided:

“6. Insurers shall ensure that proportionate deductions are not applied in respect of the hospitals which do not follow differential billing or for those expenses in respect of which differential billing is not adopted based on the room category. This shall be clearly specified in the policy terms and conditions.”

14.  In the present case, the emails and documents as available on record does not suggest that any effort on the part of the OPs to ascertain whether there was differential billing by the treating hospital or not, before applying proportionate deductions. Even in the emails as sent by the OPs, this aspect has not been explained. The complainants have alleged that the OPs have not conducted any sort of inquiry with the hospital regarding the differential billing with respect to room rent. Since the OPs have failed to appear throughout the proceedings, and have not given either the Complainant an adequate reasoning as to the said deductions or provided copy of any enquiry for conducting any such enquiry prior to the proportionate deduction, we are assuming that no such enquiry was conducted regarding differential charges by the hospital i.e. whether the medical expenses are proportionate to the room rent or not and to what extent, before applying proportionate deduction.
15. In view of the judgment of Hon’ble National Commission in the Kariappa (supra) case, the proportionate deduction, in our opinion, is arbitrary and not founded on any legal basis. Therefore we are of the opinion that the proportionate deduction, sans any enquiry to that effect by the OPs, is deficiency of service and unfair trade practice adopted by both the OPs.
16. With regard to the deducted amounts of (i) Rs. 8,818/- on account of non-payable diat, admission, TPA evaluation charges & documentation and (ii) Rs. 1104/- on account of non-payable consumable items, we do not find any deficiency of service on part of OPs as under different clauses of the terms and conditions of the policy the same are not admissible. Further, the deduction of the daily room rent being more than 1% of the insured value is also in consonance with clause 3.a (a) of the policy terms and conditions. It is also to be noted here that in the email dated 19.0.2022 sent to the OPs and Insurance Ombudsman, the Complainant has accepted all other deductions except the proportionate deduction of Rs. 1,81,075/-. Once the Complainant has accepted other deductions, he is pray for payment of such deducted amounts.
17. For the foregoing reasons, we allow this complaint in part and hold both the OPs jointly and severely liable for the deficiency of service and also for adoption of unfair trade practice. Accordingly we pass following directions:
    1. OP-1 is directed to reimburse the sum of Rs. 1,81,075/- along with an interest @9% PA from the date of institution of the claim i.e. 09.07.2022 to the Complainant within a period of three weeks from the date of receipt of this order.
    2. OP-1 is directed to pay compensation of Rs. 50,000/- to the Complainant on account of deficiency of service and for adoption of unfair trade practice within a period of three weeks from the date of receipt of this order.
    3. If the above payment is not made within the three weeks period as specified, the entire amount payable at the end of three weeks period shall carry interest @ 12% PA till actual payment is made to the Complainant.
    4. It is clarified that after making the payment to the Complainant in compliance of this order, as OP-1 and OP-2 are held jointly and severely liable, OP-1 shall be at liberty to recover 50% of the compensation so awarded, from OP-2.
18. Office is directed to supply the copy of this order to the parties as per rules. Thereafter, file be consigned to the record room.

 

 

 

___________________________

Divya Jyoti Jaipuriar, President

 

 

 

___________________________

Ashwani Kumar Mehta, Member

 

 

 

___________________________

Harpreet Kaur Charya, Member