Health Insurance Claim Denied Due to Non-Disclosure of Previous Surgery – Legal Remedies Available

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by

Adv Sudhir Rao
in

One of my clients recently had a case which I am explaining below and if you are stuck in such similar situation, here is what to do.

Note: Due to attorney-client privilege, I cannot disclose complete case details or identify the actual parties involved. However, I am sharing the essential facts and legal approach so that if you find yourself in a similar situation, you can understand the available solutions and legal remedies.

Health Insurance Claim Denied Due to Non-Disclosure of Previous Surgery - Legal Remedies Available

Mr.X had purchased a health insurance policy from XYZ Insurance Company in early DD/MM/2023 for his mother. After 30 months of premium payments and clearing all waiting periods, his mother required urgent hysterectomy surgery. They approached ABC Hospital in City A for cashless treatment approval. However, XYZ Insurance Company denied the cashless claim, citing non-disclosure of a previous gallbladder removal surgery that occurred in 2015. Mr.X genuinely claimed he was unaware of this procedure when purchasing the policy. The insurance company invoked the non-disclosure clause to reject the claim, leaving the family in financial distress. This case highlights the complex relationship between insurance law, consumer protection, and the doctrine of good faith in insurance contracts.

Advice in Such Cases

Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation to come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.

Gather all medical records and documentation from the previous surgery to establish timeline and necessity. Review your insurance policy terms carefully, especially clauses related to pre-existing conditions and non-disclosure. File complaints with the Insurance Regulatory and Development Authority immediately. Document all communication with the insurance company in writing.

Applicable Sections of Law

Under the Bharatiya Nyaya Sanhita (BNS), Section 318 addresses cheating and dishonest inducement, which may apply if the insurer acts in bad faith. Section 351 of BNS covers criminal breach of trust by corporations. The Bharatiya Nagarik Suraksha Sanhita (BNSS) Section 173 provides for filing complaints against unfair trade practices. Consumer Protection Act, 2019 offers additional remedies for deficiency in service. The Insurance Act, 1938 and IRDA guidelines provide regulatory framework for such disputes.

If You Are the Complainant

  • File complaint with Insurance Ombudsman within one year of final rejection
  • Approach Consumer Forum for deficiency in service and unfair trade practices
  • Lodge complaint with IRDA’s Integrated Grievance Management System online
  • Maintain detailed records of all premium payments and policy documents
  • Seek independent medical opinion on correlation between previous and current conditions
Health Insurance Claim Denied Due to Non-Disclosure of Previous Surgery - Legal Remedies Available

If You Are the Victim

  • Immediately arrange for alternative funding for urgent medical treatment
  • Document all financial losses and medical expenses incurred due to claim denial
  • Obtain written confirmation from insurance company stating specific reasons for denial
  • Request detailed investigation report and medical board findings from insurer
  • Contact patient rights organizations and insurance advocacy groups for support

How the Police Behave in Such Cases

Police typically treat insurance claim denials as civil disputes rather than criminal matters unless fraud is clearly established. They may be reluctant to register FIR without substantial evidence of criminal intent. However, if unfair trade practices or cheating can be proven, police will investigate under relevant BNS sections. Documentation and expert opinion significantly influence police response to such complaints.

FAQs People Normally Have

Can insurance company deny claim for non-disclosure of unrelated surgery? Yes, if policy terms specifically require disclosure of all previous medical procedures, regardless of correlation.

What if I genuinely forgot about previous surgery? Genuine ignorance may be a defense, but burden of proof lies on you to establish lack of knowledge.

How long do I have to file complaint? Insurance Ombudsman allows one year from final rejection, Consumer Forum allows two years.

Can I get compensation for mental harassment? Yes, Consumer Forums regularly award compensation for mental agony and harassment in insurance cases.

Health Insurance Claim Denied Due to Non-Disclosure of Previous Surgery - Legal Remedies Available

What Evidence Is Required?

  • Complete medical history and records from all treating physicians
  • Insurance policy documents and all premium payment receipts
  • Hospital discharge summaries and treatment recommendations
  • Correspondence with insurance company including claim forms and rejections
  • Medical expert opinions on correlation between previous and current conditions
  • Evidence of financial hardship caused by claim denial
  • Witness statements from family members regarding knowledge of previous surgery

How Long Will the Investigation Take?

Insurance Ombudsman typically resolves cases within 30-45 days of complete documentation. Consumer Forum proceedings may take 6-12 months depending on complexity. IRDA grievance redressal usually takes 15-30 days for initial response. Court proceedings can extend beyond 2-3 years. Regulatory investigations by insurance authorities typically conclude within 60-90 days.

Advocate Sudhir Rao, Supreme Court of India

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