Child’s Typhoid Claim Rejected: Consumer Commission Orders Insurer To Pay Over Rs 67,000

A health insurance policy is meant to offer financial support when a medical emergency strikes. But for one father in Punjab’s Tarn Taran, a claim for his child’s hospitalisation for typhoid fever was rejected despite the treatment records and bills being submitted. The district consumer commission has now directed the insurer to reimburse the medical expenses, besides paying compensation and litigation costs.

The commission ordered Star Health and Allied Insurance Company to pay Rs 54,286 towards the child’s treatment expenses. It also awarded Rs 7,500 as compensation for harassment and Rs 5,500 towards litigation expenses. The total payout comes to over Rs 67,000.

The case underlines an important point for health insurance policyholders: an insurer cannot reject a genuine hospitalisation claim merely by referring vaguely to discrepancies in documents, without showing exactly what information was missing or why the claim was not payable.

Child Was Hospitalised For Three Days

The policyholder had bought a family health insurance policy in 2018 and had continued renewing it. The policy provided a sum insured of Rs 5 lakh, along with a cumulative bonus.

In August 2023, the policyholder’s young son was taken to a hospital in Tarn Taran after running a high fever. Doctors advised admission, following which the child was treated for enteric fever and sepsis. He remained admitted for nearly three days before being discharged.

Before the child was admitted, the father informed the insurer and provided the policy details. The request for cashless treatment was not cleared. As the treatment could not be delayed, he paid the hospital bill of Rs 54,286 himself, according to a recent report by The Indian Express.

The father then sought reimbursement and submitted the hospital bills, discharge papers, and other treatment records. The insurer rejected the claim, saying there were discrepancies in the documents.

Commission Finds Rejection Was Not Properly Supported

The consumer commission examined the available records and noted that the insurer had not identified the specific document that was allegedly missing. It also found that there was no record to show that the insurer had formally asked the policyholder to submit a particular document which he failed to provide.

The commission observed that once a policyholder provides the discharge summary, bills, treatment papers and claim form, the insurer must establish any breach of policy conditions with evidence. A claim cannot be turned down on general or unclear grounds.

The insurer did not contend that the hospitalisation was fabricated or that the child had not received treatment. It also did not produce material to show that the documents were forged, manipulated or unreliable. The treatment had been given at a recognised hospital, and the insurer had not placed any expert opinion on record to challenge the treating doctor’s decision to admit the child.

The commission also rejected the insurer’s argument that the claim amounted to wrongful enrichment. It held that there was no evidence of fraud, suppression of facts or violation of a policy exclusion.

What Policyholders Should Learn From The Order

A cashless denial does not automatically mean that a reimbursement claim will fail. In emergencies, policyholders should prioritise treatment and keep all original documents safely, including admission papers, discharge summary, prescriptions, investigation reports, pharmacy bills and payment receipts.

When a claim is rejected, ask the insurer for a written repudiation letter that clearly states the policy clause being relied upon. Also seek details of the exact document, medical information or exclusion that led to the decision.

A policyholder can first raise the matter through the insurer’s grievance cell. If the dispute remains unresolved, it may be taken to the Insurance Ombudsman or the appropriate consumer commission, depending on the facts of the case and the relief sought.

The order serves as a reminder that insurers are entitled to verify claims, but policyholders cannot be left without reimbursement merely because an insurer raises unsupported doubts after a genuine hospitalisation.

FAQs

Can an insurer reject a health claim by citing vague document discrepancies?

No. The insurer should clearly identify the missing or deficient document and explain how it affects claim eligibility under the policy.

Does denial of cashless treatment mean a reimbursement claim will also fail?

Not necessarily. A policyholder can pay for emergency treatment and later seek reimbursement by submitting all required medical and payment records.

What should policyholders do after a health insurance claim is rejected?

Ask for a written repudiation letter citing the exact policy clause, then approach the insurer’s grievance cell, the Insurance Ombudsman or a consumer commission if needed.