Criticising the insurance companies’ approach in dragging their feet in reimbursing Mediclaim for Covid-19 treatment, the Gandhinagar District Consumer Dispute Redressal Commission said it amounts to a breach of law on part of the insurers because private hospitals charged exorbitant rates from helpless patients during the troubled times.
The case involved a 72-year-old lawyer from Gandhinagar, Bipinbhai Vyas, who tested Covid-positive in September 2020. For the first five days, he remained in home isolation and took treatment. But after he complained of breathing problems, he was shifted to CIMS Hospital in Ahmedabad. He paid Rs 2.5 lakh for a week’s treatment in the hospital. Vyas had an insurance cover from the Oriental Insurance Co Ltd, which paid him only Rs 91,000 and deducted Rs 1.59 lakh.
The insurer justified deductions by submitting that following the Gujarat high court’s order, the Ahmedabad Municipal Corporation (AMC) and the state government came up with a notification fixing rates for Covid treatment in private hospitals. The amount was deducted according to the AMC circular, the insurer said.
After hearing the case, commission’s president DT Soni and member JP Joshi observed, “Insurance companies cannot deduct or repudiate Mediclaim for Covid-19 treatment because private hospitals have taken exorbitant charges from vulnerable patients for treatment provided during troubled times. If done, it amounts to a breach of law.” It added that deducting amounts from the claim is also a breach of guidelines issued by the Insurance Regulatory and Development Authority (IRDA) during the pandemic.
It ordered the insurer to pay Rs 1.59 lakh with eight percent interest to Vyas. The commission has also asked the company to pay Rs 10,000 compensation for causing mental agony to the consumer.