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Court Slams Star Health: Insurer Can't Decide Your Treatment, Orders Payout for Rejected Covid Claim

In a significant ruling, the District Consumer Commission has unequivocally stated that an insurance company does not have the authority to dictate the line or method of a patient's medical treatment. This decision was made while the panel was hearing a complaint against Star Health and Allied Insurance for the wrongful rejection of a Covid-19 related hospitalization claim.

The case centered on a policyholder named Nagar, who was admitted to Yatharth Hospital in Greater Noida in January 2022—during the fourth year of her policy—after developing a high fever and experiencing breathing difficulty. Believing immediate hospital care was essential, the family informed the insurer as per policy rules and was initially told a cashless claim would be approved.

However, Star Health rejected the claim. The insurer defended its decision by arguing that its review of the medical documents indicated only "simple complaints" such as fever and body pain. Star Health asserted that the patient had asymptomatic Covid and, according to government guidelines, did not require hospital admission and could have been managed at home.

The Commission dismissed the insurer's defense, ruling that an insurance company cannot substitute its judgment for that of the treating physician. Star Health has been directed to pay the claimant nearly Rs 50,000, along with 6% annual interest and an additional Rs 2,000 for litigation costs. The company must comply with this order within 30 days.

For source of the report, Economic Times report.

If you have been subjected to rejected insurance claims, you can contact Bimacure for free legal consultation in any kind of insurance-related issue.