Malappuram: The Malappuram District Consumer Disputes Redressal Commission has taken action against Oriental Insurance Company for denying MEDISEP benefits to a resident of Perimpalam near Perinthalmanna. As per the complaint, the insurance company denied the beneficiary’s claim for treatment at a private hospital in Perinthalmanna, despite his admission for severe fever.

Oriental Insurance is the agency responsible for implementing the Medical Insurance Scheme for State Employees and Pensioners (MEDISEP) in its first phase.

The Commission imposed a fine of ₹1,91,452 on the company while considering the MEDISEP beneficiary's complaint. Out of this ₹1.91 lakh, ₹1,36,452 should be paid as treatment costs, ₹50,000 as compensation, and ₹5,000 as court expenses within one month. Any delay will attract interest at nine per cent, ordered the Commission, chaired by K Mohandas, with members Preethi Sivaraman and CV Mohammed Ismail.

In the order, the panel stated that the insurer had no authority to decide that MEDISEP benefits could not be granted on the grounds that inpatient care was “not necessary.”

The company had initially informed the complainant that only ₹18,000 would be sanctioned for 12 days of hospitalisation. Later, after reviewing the treatment records, the insurer claimed that the illness did not require hospital admission and therefore the claim would not be approved. This prompted the complainant to approach the Consumer Commission.

After reviewing the evidence, the Commission concluded that the insurer’s action amounted to a deficiency in service. It dismissed the company’s argument that complaints about MEDISEP benefit denials should only be taken to district or state committees or the Ombudsman, and not to the Consumer Commission. The Commission noted that an insurance company has no authority to decide whether a patient should be admitted or whether medicines should be administered by injection, and held that denying benefits on such grounds is unacceptable.