Exclusion Clause:Preventive Medication

Adjudication by Ombudsman- Life & General Medical

Brief Background

The Insured was diagnosed with “Stroke and Newly Diagnosed Hypertension”. Insured’s post hospitalization claim was not paid in full by the Insurer as the prescribed medication are not medically necessary for the treatment of the diagnosis and is preventive in nature.

The Case Manager handling this dispute gave her recommendation favouring the Insurer.The Insured who did not accept the recommendation has now referred the dispute to the Ombudsman for Adjudication.

Issue

The issue to determine here is whether the Insurer is justified in refusing to reimburse the claim on the grounds that the prescribed medication are not medically necessary and is preventive in nature.

Key findings

A. The relevant policy provisions are as follows : -

PART 3: Definitions

Medically Necessary :

Medically Necessary means a medical service which is :

(a) consistent with the diagnosis and customary medical treatment for a Disability;

(b) in accordance with standard of good medical practice, consistent with current standard of professional medical care, and of proven medical benefits;

(c) not for the convenience of the Life Assured or the Doctor, and unable to be reasonably rendered out of Hospital (if admitted as an inpatient);

(d) not of an experimental, investigational or research nature, preventive or screening nature ; and

(e) for which the charges are fair and reasonable and customary for the Disability.

B. The attending doctor of the Insured had given an explanation stating that the prescriptions were in fact medicine and medically necessary to treat the Insured. It is also his prerogative to prescribe the medication to treat the Insured.

C. Clarification letter from Ministry of Health, Malaysia that the prescription “NeuroAid” and “Tanakan” are classified as traditional medicine. The efficacies are not proven through clinical studies.

Adjudication and reasons

We adjudicate this dispute in favour of the Insured.The following are our reasons:-

1. the MOH has classified Neuroaid as traditional medicine, not preventive. The provision referred by the Insurer is silence on the use/prescription of traditional medicine. The word ‘preventive’ was not defined in the policy either.This creates ambiguity as to whether traditional medicine falls under preventive medicine. In construing insurance policy, the contra proferentum rule should apply if there is ambiguity or doubt as to the extent of the policy. Since the policy is prepared by the insurance company, the doubt and ambiguity should be construed in favour of the insured.

2. The Insured, being a lay person, relied entirely on his treating doctor advice with regards to treatment given and medicine prescribed especially after having undergone a major life threatening stroke trauma. Due to this lack of information, the Insured was unable to make an informed decision on whether the prescription will be covered by the policy. In this regards, we think it is only fair if the Insurer reimburse the Insured who had no knowledge of what is medically necessary and what medicine would not be covered by the policy.

3. The industry practice show that there are inconsistencies with some paying for the above prescription and some not. As such, the Insurer here cannot rely on the argument of industry practice to refuse the claim.

Based on the above considerations, we find that it is only fair and reasonable for the Insurer to reimburse the balance of the post hospitalization prescription to the Insured.