MEDISEP Reimbursement Cannot Be Denied Solely for Treatment in a Non-Empanelled Hospital: “Factum of Treatment” as the Decisive Test

1. Introduction

The decision in ANILKUMAR B S v. THE STATE MEDICAL OFFICER (2026 KER 50052, Kerala High Court, decided on 08-07-2026) addresses a recurring problem in public/insurance-backed medical schemes: whether reimbursement can be refused merely because the beneficiary obtained treatment from a non-empanelled hospital.

The petitioner, a 54-year-old MEDICEP/MEDISEP scheme beneficiary, sought oncology consultation and treatment for Acute Myeloid Leukaemia. He asserted that empanelled/higher centres under the scheme lacked the requisite staff or equipment, leading to his referral to Amrita Institute of Medical Sciences (a non-empanelled hospital). His claim was rejected by the insurer on the ground of non-empanelment, prompting him to approach the District Grievance Redressal Committee (4th respondent) and then the High Court for expeditious and lawful consideration of his reimbursement application.

The central issue was narrow but important: Can a MEDISEP/MEDICEP claim be rejected solely because treatment was taken at a non-empanelled hospital, even when the treatment is otherwise covered under the scheme?

2. Summary of the Judgment

The High Court held that non-empanelment by itself cannot be the sole reason to reject an otherwise valid medical reimbursement claim. Relying on the Supreme Court’s ruling in Shiv Kant Jha Vs. Union of India [(2018) 16 SCC 187], the Court reiterated that the real test is the “factum of treatment”—i.e., whether the claimant actually underwent the treatment and whether it is supported by certified medical records.

The writ petition was disposed of with directions to the 4th respondent to:

  • consider the petitioner’s claim,
  • verify the factum of treatment based on supporting documents,
  • if verified, admit the claim (since rejection solely for non-empanelment was impermissible), and
  • disburse admissible amounts within one month, after hearing the petitioner.

Significantly, the Court also noted that the additional 6th respondent’s counter affidavit admitted that the treatment fell within the scheme’s Catastrophic Package and that specific amounts were “admissible”, strengthening the conclusion that rejection on a purely technical ground could not stand.

3. Analysis

3.1. Precedents Cited

(a) Shiv Kant Jha Vs. Union of India [(2018) 16 SCC 187]

This Supreme Court precedent is the backbone of the High Court’s reasoning. The quoted passage (para 17 in the Supreme Court decision, as extracted in this judgment) establishes three linked propositions:

  1. Medical decision-making primarily lies with the treating doctor, not with bureaucratic scheme administrators or the patient’s family. Where specialized treatment is required, selecting an appropriate facility is often a clinical necessity rather than a discretionary preference.
  2. Reimbursement cannot be denied merely because the hospital is not included/empanelled under a Government Order or scheme list. Non-inclusion is treated as a “technical ground” when contrasted with genuine medical need.
  3. The decisive test is the “factum of treatment”: authorities may (and must) verify authenticity—whether treatment was actually taken and is supported by duly certified records. Once established, denial on technicalities is impermissible.

The Kerala High Court effectively imports this doctrine into the MEDISEP/MEDICEP context: verification is legitimate; blanket rejection for non-empanelment is not.

(b) Ext.P9 judgment in W.P.(C)No.21799 of 2024

The petitioner relied on Ext.P9 judgment in W.P.(C)No.21799 of 2024, where, following the Supreme Court’s approach, a similar claim was directed to be considered/honoured. While the present judgment does not reproduce Ext.P9 in detail, it treats it as a consistent application of Shiv Kant Jha Vs. Union of India [(2018) 16 SCC 187] to analogous reimbursement disputes.

In effect, Ext.P9 functions as an intra-court reinforcement: it signals that Kerala High Court has previously required MEDISEP/MEDICEP administrators to prioritize substantive entitlement over empanelment formalities, subject to verification.

3.2. Legal Reasoning

The Court’s reasoning proceeds in a structured manner:

  1. Identification of the sole ground of rejection: The Court records that the claim was rejected only because the hospital was non-empanelled.
  2. Assessment of justification for non-empanelled treatment: The petitioner’s pleaded reason—empanelled centres lacking capacity and a referral to a better-equipped facility—was treated as a plausible medical necessity, aligning with the Supreme Court’s emphasis on doctor-led choices.
  3. Application of the governing principle: By applying Shiv Kant Jha Vs. Union of India [(2018) 16 SCC 187], the Court holds that non-empanelment is not a legally sufficient basis to defeat a claim when the treatment is otherwise covered.
  4. Role of verification preserved: The Court accepts the Government Pleader’s submission that authorities must be satisfied about the authenticity of treatment. It therefore orders a verification exercise—but treats it as a gatekeeping function against fraud, not a tool to enforce rigid empanelment formalities.
  5. Remedial design (administrative direction, not immediate payout by court): Rather than itself quantifying and ordering reimbursement, the Court directs the statutory/administrative forum (4th respondent) to decide, with a strict timeline and hearing requirement. This reflects judicial restraint while ensuring enforceable compliance.

A key factual lever is the counter affidavit admission that the treatment falls within the Catastrophic Package and that amounts are admissible. Once coverage/admissibility is not in serious dispute, the legal question collapses to whether non-empanelment alone can defeat the claim— to which the Court answers in the negative.

3.3. Impact

This judgment strengthens a practical rule for MEDISEP/MEDICEP administration in Kerala: empanelment status cannot operate as an absolute bar when a beneficiary establishes genuine treatment supported by records and the treatment is otherwise scheme-covered.

Likely implications include:

  • Shift from “empanelment-first” to “verification-first” decision-making: grievance committees/insurers must focus on authenticity and coverage rather than mechanically rejecting claims.
  • Reduced hardship in catastrophic/urgent care cases: beneficiaries compelled by medical necessity to seek specialized care outside the panel have stronger grounds for reimbursement.
  • Administrative accountability through timelines: the one-month disbursal direction (post-verification and hearing) encourages quicker resolution in medically sensitive claims.
  • Future litigation posture: authorities may respond by tightening documentary scrutiny and referral documentation requirements (which is consistent with the “factum of treatment” test), but cannot rely on non-empanelment as the sole dispositive reason.

4. Complex Concepts Simplified

  • Empanelled hospital: a hospital officially listed/approved under a scheme for cashless treatment or reimbursement. Non-empanelled means not on that list.
  • MEDICEP/MEDISEP Scheme: a government-backed medical insurance/benefit framework for eligible persons; this case treats reimbursement as claimable where the treatment is covered, even if taken outside the panel, subject to verification.
  • Catastrophic Package: a higher-value coverage category within the scheme for serious illnesses (here, leukemia-related oncology care), typically with higher admissible limits.
  • Factum of treatment: the core proof requirement—did the patient actually undergo the claimed treatment, supported by genuine hospital records and certifications.
  • Technical ground: a procedural/formal reason (like non-empanelment) that should not defeat a substantively valid claim when the purpose of the scheme is to provide medical support and the claim is genuine.
  • Writ petition (mandamus-type relief): a constitutional remedy used to compel a public authority/committee to perform its duty lawfully (here, proper consideration and disbursal after verification).

5. Conclusion

ANILKUMAR B S v. THE STATE MEDICAL OFFICER reinforces an entitlement-focused approach to medical reimbursement disputes under MEDISEP/MEDICEP: a claim cannot be rejected solely because treatment was taken in a non-empanelled hospital. Anchored in Shiv Kant Jha Vs. Union of India [(2018) 16 SCC 187], the judgment frames “factum of treatment” as the decisive test, while preserving the authority’s power—and duty—to verify authenticity. The ruling is likely to shape future grievance redressal and reimbursement adjudication by prioritizing substantive medical necessity and verified treatment over rigid panel formalities.