DCDRC: Insurer Cannot Ignore Doctor’s Decision to Reject Claims; Orders Star Health To Pay Father ₹94,000 Payout Over Wrongful ‘Unnecessary Hospitalisation’ Denial

A Himachal Pradesh consumer forum has held that an insurer cannot override a treating doctor's decision to hospitalise a patient by relying on its own in-house medical assessment, calling one such rejection "completely wrong, illegal" and a clear deficiency in service.

The Kangra District Consumer Disputes Redressal Commission, comprising president Hemanshu Mishra and members Arti Sood and Narayan Thakur, was ruling on a complaint filed by Gurdeep Singh against Star Health and Allied Insurance Company Limited, after the insurer refused to reimburse the cost of his minor son's hospitalisation.

"It is not for the insurance company's medical team to decide who should be treated as an indoor patient or who should be treated at home for any illness. It is the treating doctor who must make that decision, and once he has issued a certificate stating that treatment was required in the hospital, the repudiation of the claim is completely wrong, illegal, and amounts to a deficiency in service," the commission said in its order.

The case arose after Singh's son, Agam, developed high fever and severe throat pain in August 2023. He was first admitted to Zonal Hospital, Dharamshala, but when his condition did not improve, he was discharged on request and shifted the same day, August 12, to City Hospital, Matour, on doctors' advice. He was diagnosed with acute fever accompanied by thrombocytopenia, a drop in platelet count, and transaminitis, elevated liver enzymes, and remained hospitalised until August 17, receiving intravenous fluids and antibiotics.

Singh had held a Family Health Optima policy since 2021, covering his wife and two sons, renewed every year, including in August 2023. The treatment cost Rs 58,729, and he informed the insurer on August 15. Over a month later, on September 20, 2023, Star Health rejected the claim, calling the hospitalisation medically unnecessary.

Before the commission, Star Health did not dispute the policy's validity but denied any deficiency in service. It argued its in-house medical team had reviewed the records and concluded the child could have been treated as an outpatient, since his vital parameters and investigation reports were within normal limits. The insurer relied on Code Excl 36 of the policy, which excludes hospitalisation that is not medically warranted, to justify the rejection.

The commission was not persuaded. It noted that Agam had already been under treatment at one hospital before being shifted to another, with his symptoms documented as continuing throughout. Crucially, the commission pointed out that Star Health had not filed an affidavit from any member of its own medical team to support its claim, leaving its outpatient theory unbacked by evidence. Since the treating doctor, who had actually examined the child, had certified that hospital admission was necessary, the commission held that the insurer's medical team could not substitute its own opinion for the doctor's.

On expenses, Singh had produced bills adding up to Rs 58,729. Star Health countered with an unsigned bill assessment sheet putting the figure at Rs 33,727, but since this too lacked a supporting affidavit, the commission accepted Singh's evidence in full.

Allowing the complaint, the commission directed Star Health to pay Singh Rs 58,729, with 9 per cent annual interest from the date of filing until actual payment. It also awarded Rs 20,000 as compensation and Rs 15,000 in litigation costs, taking the insurer's total liability past Rs 93,000.

The ruling is a reminder that a treating doctor's clinical judgment carries weight an insurer's desk review cannot easily displace, especially when unsupported by sworn evidence. Policyholders facing similar rejections would do well to preserve every document, from the doctor's certificate to hospital records, bills and correspondence with the insurer, since these formed the backbone of Singh's case. The commission's findings are specific to the facts before it, but the principle applied could resonate well beyond Kangra.

Case Title: Gurdeep Singh S/o Kuldeep Singh v. Star Health and Allied Insurance Company Limited & Anr.

Date of Order: July 29, 2026

Judges: President Hemanshu Mishra and Members Arti Sood and Narayan Thakur