The central government has told the Bombay high court that no blanket direction can be given to a hospital or doctor to charge a fixed amount for a treatment and an insurer cannot be permanently directed to compensate the policy holder.
The central government has told the Bombay high court that no blanket direction can be given to a hospital or doctor to charge a fixed amount for a treatment and an insurer cannot be permanently directed to compensate the policy holder.
A division bench of Justice Mohit Shah and Justice DG Karnik was hearing a petition filed by social activist Gaurang Damani pointing to the plight of 5.50 crore consumers of medical insurance, especially after third party administrators (TPA) stopped offering cashless medi-claim benefits.
Shifting its responsibility, the Centre stated that the regulatory authority for insurance sector is the Insurance Regulatory and Development Authority (IRDA) under the IRDA Act. “It’s IRDA’s duty to regulate, promote and ensure orderly growth of insurance business. Their powers and functions also include protection of the interest of policy holders, concerning settlement of insurance claims, code of conduct, insurable interest and so on.”
The affidavit filed by Jitendra Mehan, under secretary, department of financial services, ministry of finance, states that a prospective policy buyer has a wide range of options in selecting any health insurance or medi-claim policy and an insurer of his choice. It’s a matter of contract between the insured and insurer.”
Damani has also pointed out that the IRDA regulations do not give TPAs the right to settle claims. It alleged that TPAs (on behalf of the insurer) started negotiating packaged treatment rates with hospitals and nursing homes to make them join their preferred provider network, thus subsequently reducing the number of hospitals/nursing homes for the consumers.
The government’s affidavit has said that this (issue) cannot be decided by a PIL. This requires examination and cross examination of witnesses, replies, affidavits and an elaborate trial, for which the entire matter deserves to be relegated to a regular civil court.
Despite earlier order, IRDA did not file its affidavit and the court has on Thursday directed it to file it by June 9.
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