Insurer Must Honor Cashless Approvals Until Patient Discharge: Court

In a significant ruling on insurance claim practices, the Kalaburagi District Consumer Disputes Redressal Commission has held that an insurer cannot unilaterally withdraw a cashless approval once granted for hospitalization. The commission directed the insurance company to pay ₹2.39 lakh to the affected policyholder along with interest, finding that the rejection of the health insurance claim was unjustified.

The case centered on a dispute where the insurer had initially approved cashless treatment for the policyholder but subsequently withdrew the authorization during the course of hospitalization. The commission found this practice to be in violation of consumer protection principles and contractual obligations, noting that once a patient is admitted under a cashless arrangement, the insurer cannot reverse its decision mid-treatment.

The ruling underscores the vulnerability of patients who depend on cashless health insurance facilities and establishes an important precedent for the insurance industry in South India. Consumer protection advocates view the decision as a safeguard against arbitrary claim rejections that can leave patients in financial distress during medical emergencies.

The commission's order reinforces that insurers must honor their approvals through the entire duration of hospitalization unless fraudulent or materially false information is discovered at the time of admission itself. Insurance companies in the region are expected to review their claims processing procedures in light of this judgment.