SGCCI Urges Finance Minister to Address Unethical Health Insurance Practices in Surat

Surat : The Southern Gujarat Chamber of Commerce and Industry (SGCCI) has sent a representation to the Union Finance Minister, highlighting critical issues faced by health insurance policyholders in Surat. The representation calls for immediate intervention to curb unethical practices adopted by health insurance companies, which are adversely affecting insured individuals during critical medical situations.

Unethical Practices Impacting Policyholders:

Claim Deductions and Reasonable & Customary Clause (R&C Clause): Health insurance companies in India frequently invoke the Reasonable & Customary Clause (R&C Clause) to deduct claim amounts, ostensibly based on what they consider “reasonable” for medical treatments and hospital stays. However, this practice often results in arbitrary reductions that leave policyholders burdened with significant out-of-pocket expenses. SGCCI asserts that these deductions are applied unfairly, disregarding genuine medical needs and causing financial distress among insured individuals.

Blacklisting of Hospitals: Another concerning practice highlighted by SGCCI involves the arbitrary blacklisting of hospitals by some health insurers. This practice often leaves policyholders unaware of their hospital’s status until after treatment, potentially leading to denied claims or delayed reimbursements. SGCCI advocates for transparency in hospital blacklisting criteria and urges insurers to establish clear communication channels with policyholders regarding the status of healthcare providers.

Denial of Claims Based on “No Need for Hospitalization”: SGCCI has also raised concerns over instances where health insurance claims are denied under the premise that hospitalization was unnecessary. This blanket justification fails to account for the complexity of medical conditions and individual patient needs, potentially denying rightful claims for essential medical treatments.

Call for Regulatory Intervention: SGCCI has petitioned the Finance Minister to direct the Insurance Regulatory and Development Authority of India (IRDAI) to issue comprehensive guidelines addressing these issues:

Standardization of R&C Clause: SGCCI proposes standardized guidelines for the application of the Reasonable & Customary Clause across all health insurance companies. This would ensure transparency and fairness in claim reimbursements, protecting policyholders from arbitrary deductions.

Transparency in Hospital Blacklisting: Insurers should be mandated to maintain and regularly update a publicly accessible list of blacklisted hospitals. Policyholders must be informed upfront about the status of hospitals in the insurer’s network to make informed decisions during medical emergencies.

Review of Hospitalization Criteria: SGCCI recommends a review of the criteria used to determine the necessity of hospitalization. Policies should be revised to reflect the varied medical needs of patients, ensuring that claims are adjudicated based on medical necessity rather than rigid definitions of hospitalization.