The other day, a claims executive arbitrarily rejected a claim for hospitalization for a heart condition. When the claim was reported, the executive on its own initiative took out the patient’s past medical records. There he found mention of the patient’s smoking history. So, he quickly put the pieces together and concluded that the cardiovascular problem was caused by smoking. Medical insurance policies do not cover ‘treatment for alcohol, drug, substance abuse or any intoxicating condition and its consequences’. Rejection considered smoking as an addictive condition and cardiovascular problems as its consequence. However, this exclusion is intended to exclude treatments to cure addiction or direct consequences of abuse such as overdoses. The association of a habit with a disease, circumstantial or indirect, can be at best a guess. Such adjudication has no medical basis other than self-righteousness. Unfortunately, such hyperactivity is not uncommon. Sometime back the claim for liver cirrhosis was rejected because the patient used to consume alcohol occasionally. It is common knowledge that excessive alcohol can damage the liver. But, even non-drinkers face liver damage.
As a relief in both cases, the initial decisions were overturned when the matter gained momentum. However, it was not before patients suffered significant suffering. Consider that the cardiac treatment was done in a network hospital, hence the patient was eligible for cashless claim settlement. The decision to dismiss the claim came several hours after the doctor had discharged the patient. However, the patient was kept in the hospital till the bill was paid. The patient was unable to pay the claim in cash. In such a situation, he had to stay in the hospital overnight. Final approval came only the next day. While the final decision was positive, it left a bad impression on the patient and his family. It is natural for the policyholder to distrust insurers now. But, who pays for the suffering? Where can policyholders approach for such complaints?
Some of these issues are not limited to blame on front-line level performance, but conscious policy actions of insurers. Consider the case of a single health insurer that suddenly decided to stop paying claims for treatment taken in non-network hospitals. Hundreds of claims were rejected. The insurer cited a condition which is hidden between the lines of a completely unrelated clause and is not in the spirit of the existing rules on exclusion. The insurer itself kept this clause in cold storage for many years and had an established practice of paying all non-network claims. The insurer’s stance will not stand up to regulatory or legal scrutiny. Policyholders have limited recourse in such cases. The administrative burden of filing a case with the Ombudsman is very high and often outweighs the benefits of recovery of claims or undue deductions. Ombudsman decisions can take time, in some cases more than a year. Most claimants will ignore small claims disclaimers in the interest of moving forward.
The regulator has laid down a concrete framework of regulations. For example, standardization of exclusions is a hallmark regulation to bring transparency. However, insurers are finding ways around this by taking liberal interpretations. Consider the case of another stand-alone health insurer that declared that claims for oral chemotherapy are inadmissible unless the person is hospitalized. Traditional chemotherapy is administered intravenously. It does not require overnight hospitalisation, yet most insurers pay such claims on a regular basis. With the advancement of medicine, some types of chemotherapy can now be given through oral tablets. To clarify acceptability, the regulator specifically mentioned oral chemotherapy as a modern treatment modality that should not be excluded from health insurance policies. For an insurer to accept treatment but mandate hospitalization is contrary to progress in medicine. It is a word game with rules. There is a need to forcefully protect the interests of a policyholder. Without the resistance to potential regulatory action, some may continue to experiment with liberal interpretations of regulations at the expense of the policyholder. Currently, there is little incentive for an insurer to give a policyholder the benefit of the doubt, better train its claims officers, and put the policyholder’s interest first.
(I am told that the decision on the cardiac claim was reconsidered only after the claims executive was informed that his skip-supervisor also smoked. He didn’t want to lecture the master.)
Abhishek Bondia is the Principal Officer and Managing Director of SecureNow.in.
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