Insurer cannot revoke cashless approval at discharge, rules Kalaburagi consumer commission
Kalaburagi consumer commission holds that an insurer cannot withdraw cashless treatment approval at discharge and directs Niva Bupa to pay ₹2,39,574 to a policyholder.
The Kalaburagi District Consumer Disputes Redressal Commission has ruled that an insurance company cannot revoke approval for cashless treatment at the time of a patient's discharge from hospital and reject the claim on waiting-period grounds.
The order was passed by the commission's in-charge president, Malathi Guranna, and member M. Lokesh, in a complaint filed by Shali Nazir and his son Shali Khader Basha against Niva Bupa Health Insurance Company and Policybazaar Insurance Brokers Pvt. Ltd.
According to the complaint, Shali Nazir had bought a family floater health policy through Policybazaar for an annual premium of ₹37,460, with a sum insured of ₹10 lakh covering himself, his wife and his son. The original policy ran from November 11, 2022, to November 17, 2023, and was renewed for November 18, 2023, to November 17, 2024.
During the renewed period, the second complainant developed sudden pain in his right knee. He was examined at Spectrum Diagnostics and Healthcare Centre in Bengaluru on April 3, 2024, and later at Apollo Hospital, Bengaluru, on June 15, 2024, where doctors advised surgery.
Approached through the hospital for cashless approval, the insurer initially granted it. However, at discharge, the company withdrew the approval by email and rejected the claim, invoking Clause 6.2(f) of the policy and stating that the 24-month waiting period for the treatment had not been completed. The complainants consequently had to bear ₹2,24,574 in medical expenses at Apollo Hospital.
Alleging deficiency in service, they approached the commission through advocate Vaijanath S. Zalaki.
After examining the original policy period, its renewal, the date of treatment and the documents filed by the insurer, the commission held that the rejection under Clause 6.2(f) was not justified. It took particular exception to the insurer granting cashless approval first and then withdrawing it as the patient was being discharged.
The insurer has been directed to pay ₹2,24,574 towards medical expenses, ₹10,000 as compensation for deficiency in service and mental agony, and ₹5,000 towards litigation costs — a total of ₹2,39,574 — within 45 days of the order. In case of delay, it must pay interest at 6% a year from July 28, 2026, until payment.
The insurance company contested the complaint before the commission. Policybazaar, the second opposite party, did not appear despite service of notice and was proceeded against ex parte.
Advocate Zalaki, who represented the complainants free of cost, later visited their residence and handed over the demand draft for ₹2,39,574 received from the insurance company, ensuring the relief reached the consumers.