HYDERABAD: A consumer court in Hyderabad has directed Star Health and Allied Insurance Company to reimburse more than Rs 3.35 lakh to a senior citizen policyholder, ruling that the insurer wrongly rejected a knee surgery claim by terming it a “pre-existing disease”.
The district consumer disputes redressal commission-1, Hyderabad, held that the rejection of the claim amounted to “deficiency in service” and an “unfair trade practice”.
The complaint was filed by Hyderabad residents IRK Anil Kumar and Icchapurapu Lalitha after the insurer denied cashless treatment and reimbursement for Lalitha Icchapurapu’s left knee osteoarthritis surgery performed at Yashoda Hospital in December 2023.
According to the complainants, Lalitha Icchapurapu had undergone right knee replacement surgery in 2015, but did not have a history of osteoarthritis in the left knee when the health insurance policy was purchased in January 2021.
However, the insurer rejected the claim, arguing that hospital records from 2015 mentioned osteoarthritis in both knees and that the condition qualified as a pre-existing disease which had not been disclosed while purchasing the policy.
The insurer argued that the claim was excluded under pre-existing disease clauses and also cited room rent and co-payment conditions. However, the consumer commission observed that the company failed to provide convincing medical evidence of suppression of facts and noted that the 2015 treatment concerned only the right knee, with no direct link to the 2023 surgery on the left knee.
The commission also criticised the insurer for adopting a “technical” approach to deny a genuine medical claim. Referring to several Supreme Court and National Consumer Disputes Redressal Commission rulings, the bench observed that insurance companies should not reject claims on “flimsy grounds” without substantial proof.
Partly allowing the complaint, the commission directed the insurer to pay Rs 3,35,967 towards medical expenses, Rs 50,000 as compensation and Rs 10,000 towards litigation costs within 45 days, failing which the amount would attract 8% annual interest.
