The Karnataka High Court has ruled that health insurance companies cannot reject a claim merely on the ground that a patient did not need to be admitted to hospital for treatment, in a judgment that could have wide implications for mediclaim disputes across the country.
The case involved National Insurance Co. Ltd, which had refused to reimburse two injections administered to a retired Bank of Baroda officer, Padmanabha Shetty, as part of his cancer treatment. The insurer had already settled claims for four separate hospitalisations connected to his treatment but argued the two injections counted as out-patient care and fell outside policy coverage.
Justice Suraj Govindaraj, dismissing the insurer’s petition, held that hospitalisation is a mode of delivering treatment and not an end in itself, and that denying coverage simply because modern medical practice made hospital admission unnecessary would defeat the purpose of health insurance.
The court upheld an earlier ruling by the Permanent Lok Adalat, Mangaluru, which had directed the insurer to pay the disputed claim amount with 6% annual interest, along with ₹25,000 in compensation. The High Court additionally imposed a cost of ₹50,000 on the insurer, payable to the retired officer.