When we purchase a health insurance policy, we feel secure hoping that the policy will come handy when we fall sick, more so when the sickness is sudden and unexpected. But there can be a slip between the cup and the lip and we may be in for a surprise, when the insurance company rejects our claim either partially or fully, depending upon the terms of the policy written in small letters, which are normally not observed by us in our hurry burry of our daily life.
But there are instances where insurance companies reject our claims for reasons outside the main terms of the policy on the grounds of reasonable charges. This many times cause considerable hardships to the hapless patients, who are left high and dry, resulting in defeating the very purpose of health insurance.
How do you ensure that your claims are not rejected? Here is a real life story of a senior citizen, who through his patience and perseverance got back the amount of his claim rejected by an insurance company for no fault of his.
Here is a real life story:
Following is the first person account of the pensioner in his own words:
I am a retired employee of a public sector organisation covered under a group health insurance policy issued by an approved insurance company for the last couple of years. The policy covers all expenses of hospitalisation to the tune of Rs4 lakh with certain limits towards room and boarding and for intensive care unit (ICU) expenses. Except for this sub-limit on room and boarding expenses, the policy did not have any other sub-limit except to say that they would consider only reasonable and customary charges.
In May 2016, I went to my usual ophthalmologist as I was finding that my eyesight was not in perfect condition. On a thorough investigation, the doctor found out that I needed cataract surgery for both the eyes. This, he said, could be performed under the new system of laser cataract surgery, which, according to him, makes very precise incisions in the cornea. He further said people now have the choice of having standard cataract surgery performed with a blade or a laser cataract surgery.
What is the cost of the surgery?
When I asked the doctor as to what would be the cost of the laser surgery, he explained that it depends upon the type of lens used for being implanted into my eyes. He said that for my eyes he would recommend imported lens of Bausch & Lomb and the total cost of surgery would be Rs35,000 per eye. He also suggested surgery for both the eyes leaving a gap of one week between the two surgeries and the total cost of two surgeries would be Rs70,000, including the cost for lenses.
Being an experienced senior doctor with whom I have been consulting for over 20 years, I had total faith in him and hence readily agreed for the surgery as suggested and fixed a date for the first surgery in a local hospital where he normally operates. He confirmed that the hospital would accept payment through credit card, which helped me in getting the surgery done without any outgo of cash immediately.
On coming home, I went through the health insurance policy and as stipulated therein, I intimated to the third party administrator of the Policy (TPA) about the proposed surgery and informed them that I would claim reimbursement of all expenses on completion of the surgery. I received from the TPA just an acknowledgement of my e-mail, informing me that I could contact them if I needed any further assistance in this regard.
Submission of my claim and its settlement:
I had my surgery completed for both the eyes one after another with a gap of one week as scheduled. I, therefore, collected all the bills including discharge form from the hospital and meticulously filled up the claim forms downloaded from the TPA’s website and submitted them for reimbursement in two separate claims as required by them.
After 15 days, I received a mail from TPA giving details of the claim approved by them. I was surprised to find that they have rejected a substantial part of my claim giving some odd reasons. In each claim they have deducted Rs10,000 under cost of surgery (in all deducted Rs20,000) and approved only Rs25,000 for each surgery. The reasons given by the TPA for partial rejection are “Excess of PPN Package - Rs10,000” in each claim.
Nobody knows what the PPN package is. When I asked them over phone, they informed me that it means preferred provider network (PPN). What does this mean? I understand that few hospitals have agreed for a package payment for certain surgeries and in this case it is Rs25,000 for the cataract surgery. And these hospitals are called preferred provider networks or PPNs. When I asked them as to why they have not informed this to me in advance, they had no answer.
I took up the matter with the TPA and the insurance company and expressed my disagreement over deducting a substantial part of my claim for no valid reason. Neither the TPA nor the insurance company bothered to reply to my complaint, until I took up the matter strongly with the Chairman of the insurance company. Finally their Chief Grievance Redressal Officer condescended to send me a reply informing me that “the balance amount was rejected under one of the terms and conditions in the policy, which says that only ‘Reasonable and Customary Charges’ will be considered.” This was obviously in variance with what the TPA had mentioned in their approval advice to me.
Approaching the Insurance Ombudsman for rendering justice:
Not satisfied with the reasoning of the Insurer, I submitted my complaint to the Insurance Ombudsman seeking full reimbursement with interest for the delayed period and appropriate compensation for the hardships caused by the arbitrary and unjust action of the Insurance Company.
The Insurance Ombudsman took up my complaint in a manner befitting their Office and promptly called for a joint hearing of my case within a month of submitting my complaint, which is really praise worthy.
The hearing was presided over by the Insurance Ombudsman, who after personally hearing the submissions made by both the parties observed as under: “There is no upper limit or ceiling for the said procedure in the insurance policy. Secondly though the TPA was informed in advance about the hospital in which the insured proposed to take treatment, they failed to inform the insured about the tie up they had with the said hospital and to seek the tie up rates for the operation.”
The Ombudsman, taking into account of the facts and circumstances of the case, gave an award advising the insurance company to settle my claim in full and pay me the amount of Rs20,000 and to recover the same from TPA, if they so desire.
The Ombudsman and his office deserve all praise for their prompt and thoroughly professional approach to the complaints of the insured, which affirms my faith in this august institution so kindly set up by the Government.
What lessons can we learn from this real life story?
There are three lessons to learn from this story:
1. It is necessary for us, the insured, to carefully go through the terms and conditions stipulated in the policy as soon as it is received and be abreast with sub-limits, restrictions and any special conditions mentioned therein, so that we are aware of the conditionality and ensure compliance before we make a claim on the policy.
2. Every health insurance policy requires you, barring unforeseen emergencies, to inform the insurance company or its TPA in advance of any surgery proposed and full details of the same should be communicated to them to avoid any rejection of our claims later for want of advance intimation to them.
3. We should always remember that every insurance company is in the business of insurance primarily to make profits and hence they would always look at our claims with a fine-tooth comb to ensure that they do not pay a single penny more than what is due strictly in terms of the policy
Issues that require reconsideration by IRDA:
This story highlights certain issues which require reconsideration by the Insurance Regulatory and Development Authority (IRDA) as well.
Firstly, the fact that the Ombudsman did not accept the Insurer’s contention that they have considered ‘reasonable charges’ show that these ambiguous clauses do not hold water and hence they should not form part and parcel of any insurance policy. In fact, the IRDA Health Insurance Regulations specifically stipulate that all sub-limits, if any, should be clearly spelt out in the policy. IRDA should ask the insurance companies to delete all such abstract clauses, which only cause avoidable hardships to the insured, when their claims are rejected on the basis of this clause, which does not stand legal scrutiny.
Secondly, it is a mystery as to why the insurance companies who have signed agreements with certain hospitals fixing charges for certain surgeries have neither made it public nor informed the insured patients about these arrangements so far. By keeping this vital and useful information under wraps, they have not served the interest of their policy holders, many of whom may have unwittingly faced rejection of their claims for no fault of theirs.
IRDA should, therefore, direct all insurance companies to publish such information and make it a part of the insurance policies, wherever applicable and to the extent applicable, for the benefit of the insured.
Insurance is a contract of ‘utmost good faith’, normally stated in Latin as “Uberrimae Fidei” and under this doctrine; the insured is expected to declare all information about his health honestly and diligently while seeking health insurance. Based on this analogy, the insurance company should also declare all information that affects the insured in the policy document clearly and cogently so as to make their life easy and comfortable, more so when they are in pain.
(The author is a financial analyst, writing for Moneylife under the pen-name ‘Gurpur’)