New Delhi: In a major relief for patients, the Delhi high court has ruled that insurance companies would have to honour claims by valid medical policy holders who have received treatment at any government-registered hospital. Cashless facilities must also be extended to all such hospitals.

The court thus has put an end to a system where health insurance companies and third-party administrators (TPAs) insisted that a hospital had to be registered with them for patients to avail of insurance claims. The insurers and TPAs also dictated which hospitals could extend cashless facility.

The HC held that all patients were entitled to medical insurance, including cashless facility, as long as they held a valid medical claim policy and that the General Insurance Public Sector Association (GIPSA) — group of public sector insurance companies — could not insist that hospitals must be registered with them.

Though the current order was limited to patients seeking eye treatment, the court found fault with the very basis of GIPSA’s guidelines and the external system of “network hospitals” to exclude government-registered hospitals. It may, therefore, be applied to other treatments as well.

The order, an interim ruling, was passed by a bench of then Chief Justice Rajendra Menon and Justice Brijesh Sethi on May 31.

Plea says insurance regulator failed to keep regular checks

The HC bench specified that so long as a medical service provider is certified and registered with the state or central government, the health insurance claims of patients have to be accepted.

“We direct that till the next date of listing/ hearing, the benefit to the persons who have taken the insurance policies shall be granted strictly in accordance with the terms and conditions of the insurance policies and no other direction, order or system being followed shall be implemented till the next date,” HC said in a ruling that came on petitions filed by All India Ophthalmological Society (AIOS) and Delhi Ophthalmological Society. These organisations had filed a PIL against what they termed was the “rising influence of the insurance company and ‘TPA mafia’ within the healthcare system”.

HC further directed that “the benefit of providing cashless service be also extended to such medical health providers whose names may not be registered online with GIPSA but if they are registered with the respective state authorities as per law applicable to a particular state, the cashless service be extended even to these medical health providers/beneficiaries.”

While issuing the interim order, the HC also questioned insurance regulator IRDA on its 2018 norms that allow GIPSA and TPAs to have a network of preferred hospitals. “Issue notice to the IRDA as to why the impugned notification be not set aside and the functioning of the cartel formed by respondents be not stayed, as prima facie we observe that they have no legal status to function in the manner they are functioning,” the bench noted, asking IRDA to file its reply by next month.

It said till the next date, nursing homes and hospitals which are already registered with the Directorate of Health Services under the Delhi Nursing Home Registration Act, should not be compelled to take any further registration on the basis of the IRDA notification.

Dr Mahipal Sachdev, president-elect of the AIOS, welcomed the decision. The opthalmologists’ associations had moved HC challenging “the unauthorised parallel healthcare regulations being forced” by GIPSA, TPAs and IRDA on medical establishments.

The petitioners argued that these guidelines, compelling them to register with insurance and TPA networks, were illegal as the hospitals were already recognised by the state or central governments. They also blamed IRDA for ignoring the violations, arguing that “the influence of the insurance company and ‘TPA mafia’ within the healthcare system is so much that even IRDA is shying away from keeping regular checks on unauthorised working of these.”

Delhi Medical Association president, Dr Girish Tyagi, said they also plan to approach the court seeking universal acceptance of this order.

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