Partial payment of insurance claims without explanation; what to do?

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The Covid-19 crisis resulted in hospitalisation of many, thus pushing the number of insurance claims much higher than usual. There were multiple cases of claims rejections and part-payment too. Money9 Helpline received one such query from Bala Chandar.

We approached Shailesh Kumar, Insurance head and co-founder, Insurance Samadhan  for expert advice on the following query.

My wife was admitted in the hospital after getting infected with Covid-19. The insurance company denied the claim, stating that it was a mild covid-19 case and could have been managed with home quarantine treatment. But my wife was nearly two months pregnant at the time of hospitalisation. We couldn’t have taken risk. The problem is doctors did not mention it in the report that she was pregnant. I somehow managed to get a letter regarding this from the Treating Doctor and submitted it. I first applied to Grievance team, but no response came. So, I applied to Insurance Ombudsman office with all my documents. Then suddenly one day without any notice, the insurer deposited me a partial claim amount of 40% in my account. What should I do now? Is there hope for getting full claim?

– Bala Chandar, Chennai

Expert view

Response by Shailesh Kumar:

This refers to your complaint on short settlement of medical claim of your wife. Covid-19 has been a crisis and there were many similar cases due to ambiguous situations. Health insurers and TPAs took time to standardise claim settlement processes. It took time to develop a customer sensitive system which is responsible to all stakeholders. Though insurance regulator Irdai and the government issued instructions but interpretations as well as adherence have not been easy because all operations within insurance companies were difficult.

This confusion resulted into grievances and dissatisfaction among aggrieved policyholders. However, proper escalation has yielded satisfactory results of good compensation.

There were three main reasons due to which claims were rejected or part-settled:

Necessity of hospitalisation

Some policyholders got admitted to hospitals just because they had insurance, although it was not desired. This is against the principle of insurance. No one should take benefit of arrangement. Such incidents caused problems in deserving cases like yours.

Lack of a standard and active treatment

Many hospitals used expensive treatment inflating bills. Due to this, state government fixed rates for treatment. Insurance companies would pay as per standard treatment protocol and not as per arbitrary choice of hospital or the demand of customers. Each treatment needs medical justification. However, customer cannot be blamed because they were in stress and had to accept what doctors advised. Hence, it is obligatory for insurance companies to honour the claim.

Confusing policy on domiciliary treatment

This has been the main reason of dissatisfaction among policyholders. Terms and conditions require proper justification of domiciliary treatment under hospital supervision. All hospitals came out with packages for treatment at home but policyholders mostly went for telemedicine. They did not take an active line of treatment.

Your case seems to be deserving and must get at least 70% reimbursement. There can be 30% deductions because of normal exclusions. Any expert would need to see your treatment papers along with your insurance policy for proper assessment of your claims. If it is a nationalised insurance company, then your expenses can be linked to room rent.