Insurer Ordered to Pay ₹2.39 Lakh After Withdrawing Cashless Approval

In a decisive move that reinforces consumer rights, the Kalaburagi District Consumer Disputes Redressal Commission has ruled that health insurers cannot withdraw cashless treatment approval at the moment of discharge—a practice that leaves patients stranded with massive bills. The commission ordered Niva Bupa Health Insurance Company to pay ₹2.39 lakh to a policyholder whose claim was abruptly rejected after surgery.

The Broken Promise of Cashless Care

Shali Nazir had purchased a family floater health policy with a ₹10 lakh cover, paying an annual premium of ₹37,460. When his son developed severe knee pain in 2024, doctors at Apollo Hospital, Bengaluru, advised surgery. The family sought—and received—cashless treatment approval from Niva Bupa. Relief turned to distress when, at discharge, the insurer withdrew the green light via email, citing a 24-month waiting period under clause 6.2(f).

A Commission’s Firm Stand

The consumer commission, presided by Malathi Guranna with member M. Lokesh, examined the policy timelines and treatment dates. They found the rejection unjustified, especially criticizing the insurer’s last-minute withdrawal after initially approving the cashless request. The order stated that such reversals erode trust and inflict unnecessary mental agony on families already under medical stress.

The insurer first granting approval for cashless treatment and subsequently withdrawing the approval when the patient was being discharged from the hospital.

That flip-flop, the commission noted, was a clear deficiency in service.

Justice Delivered—and Delivered Personally

In a heartening close to the case, advocate Vaijanath S. Zalaki—who provided free legal representation—personally visited the complainants' home in Kalaburagi to hand them the demand draft for ₹2,39,574. The amount covers medical expenses, ₹10,000 for mental distress, and ₹5,000 in litigation costs. Niva Bupa must pay within 45 days or face 6% annual interest from July 28, 2026.

Policybazaar Insurance Brokers, through which the policy was bought, did not appear despite notice and was proceeded against ex parte.

This ruling sends a strong message: once granted, cashless approval is a commitment—not a conditional gesture that insurers can retract when the bill arrives.