The “reasonable” billing formula called into question | Ahmedabad News


Ahmedabad: A consumer commission in Ahmedabad asked insurance companies how they define “reasonable and customary charges” for deductions from health insurance claims, when there is no strict formula to standardize charges fees and medical services, which vary in each hospital.
With this question, the Consumer Dispute Redressal Commission of Ahmedabad (city) ordered the insurance companies to pay Rs 40,000 to Shailesh and Bina Shah, who paid medical bills of Rs 93,900, but the insurers paid them. Rs 53,900 and deducted the rest citing the terms and conditions of the policy to quantify the loss. The commission also called the deductions a service deficiency and unfair business practices, and ordered full payment of the claim and an additional Rs 5,000 as compensation for harassment and legal expenses.
In this case, Bina Shah was hospitalized and treated for stones, but when they applied for medical insurance, Oriental Insurance Co Ltd and Health Insurance TPA of India Ltd gave them 40,000 rupees less and said the deductions had been made on physician visit fees, surgeon fees, anesthesiologist fees and occupational therapy fees on the grounds that they are “in excess of the reasonable and customary expense clauses”.
When the couple sued the insurers through Grahak Suraksha and Pagla Samiti, the companies presented their defense. The commission was not prepared to accept the argument and said the deductions were made without explaining what constitutes reasonable and customary expenses. The commission further stated that the costs of anesthesia, surgery and occupational therapy are variable and depend on the infrastructure of hospitals, skills, seniority and expertise of doctors and that they cannot be compared to those of other nearby hospitals. The commission asserted that there can be no forced formula to standardize these fees. Each hospital and each doctor has their own rates.

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