Claim unfairly rejected? Complain to ombudsman

Even if hospital has billed at above state government rate, it could get you reimbursed fully

Kimti Lal Khatri, 55, a resident of Malviya Nagar, New Delhi, was hospitalised for 17 days for Covid. His bill came to ~3.2 lakh. First, his thirdparty administrator (TPA) informed he would have to pay ~10,700 for consumables. Later, he was told he would have to pay another ~89,000. The snag: While the hospital charged its own rates, the insurer was willing to reimburse at the rates fixed by the state government.

Shirley M. (name changed on request), 43, a marketing executive with a Bengaluru-based information technology major, underwent home treatment for Covid. She has a Corona Kavach policy from a private general insurer. She submitted her claim along with all bills. The insurer asked her for a chart of her daily fever and SPO2 levels, certified by a doctor. It also wanted a doctor to state in writing she had tested positive for Covid, though she had an RT PCR positive report. “I only had two proper consultations and two follow-up ones online with a doctor. At a time when doctors are so overburdened, how will I produce a daily chart certified by a doctor?” she asks.

According to General Insurance Council (GIC) data, by May 14, 2021, 1.48 million Covid claims have been made amounting to ~22,931.63 crore. Insurers have so far settled 1.23 million claims (83.1 per cent) amounting to ~11,784.54 crore (51.4 per cent).

Key areas of dispute

Customers’ woes are increasing. “The number of complaints has been rising,” says Milind Kharat, insurance ombudsman, Mumbai. He enumerated the key issues customers are facing.

One pertains to domiciliary or home treatment. Some insurers reject these claims saying their policy does not cover home treatment. Then there are disputes related to partial payments. “State governments (like Maharashtra) and the General Insurance Council (GIC) have issued guideline rates. If the hospital bills at a rate higher than those, insurers pay only the state government/gic rate,” says Kharat.

There are cases where the insured had a pre-existing condition, which he did not declare. Covid-related claims of such customers are also being rejected. Claims of people who had mild symptoms but got hospitalised are also being disputed by insurers.

Seek redress

If your claim is rejected or paid partially and you disagree, first file a complaint with the insurer’s Grievance Redressal Officer (GRO). A complaint filed with the Insurance Regulatory and Development Authority of India’s Integrated Grievance Management System (IGMS) is also sent to the insurer. If you are not satisfied with the insurer’s response, file a complaint with the ombudsman for your region.

Ombudsman’s take

Kharat provided insights into how an ombudsman is likely to rule in the abovementioned disputes. Take the case where the state government/gic rate is lower than the rate charged by the hospital. “The insured has paid the hospital’s rate. The state government/gic rates are not part of the policy contract and hence cannot be strictly adhered to,” says Kharat. In other words, the insurer must reimburse the customer fully.

Kharat adds: “By and large, if the hospital’s charges are not excessive, we allow them, even though they may be higher than the state government/gic rates.” However, if the hospital’s rate is excessive, then the ombudsman applies the ‘customary and reasonable’ rule. “Only reasonable expenses have to be paid. We ask the insurer to take up the issue of excessive billing with their network hospitals,” says Kharat.

Customers undergoing home treatment must check whether their policy covers it (Corona Kavach does). Also, get in writing from a doctor that you can undergo home treatment, and there is a shortage of beds.

Even in cases where a pre-existing ailment was not declared, the ombudsman could take a pro-customer stance. “We don't approve of such rejection if there is no connection between the preexisting ailment and Covid,” says Kharat. He says customers should ideally declare pre-existing ailments, but sometimes they overlook mild conditions that are under control. Insurers, he says, too, have a responsibility to conduct tests and discover those ailments at the underwriting stage. “How can someone be penalised for not declaring other diseases when he is being treated for a new ailment like Covid?” says Kharat.

Things you should know

While purchasing a policy, declare all pre-existing conditions to avoid problems. Newly-purchased policies come with an initial waiting period during which only accidental injury is covered. “The waiting period is 30 days in a standard health insurance policy and 15 days in Corona Kavach,” says Sanjay Datta, chief-claims, underwriting and reinsurance, ICICI Lombard General Insurance. He adds that the insured need to be aware of the sub-limits and co-pay features in their policy, and the balance sum insured left (if they have made a claim).

According to Kapil Mehta, cofounder and managing director, Secure Now Insurance Broker, “The insured won’t be reimbursed for oxygen cylinders and concentrators bought at premium prices for which they are unlikely to have a receipt. The same goes for plasma therapy, which is not deemed a standard procedure yet.”