Private hospitals in J&K jointly decided to reject patient admissions from September 1, alleging that general insurance company IFFCO TOKIO had not paid them several million dollars outstanding under this scheme, which had huge financial implications for these hospitals.
The high court has now directed general insurance company IFFCO TOKIO to continue with the existing agreement as per the terms and conditions of the contract in respect of Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana-SEHAT (AB-PMJAY-SEHAT) pending the resolution of the dispute with the UT government by the arbitrator.
The direction was approved in a petition filed by the Government of J&K in which it was submitted that the government launched Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana-SEHAT to provide free universal healthcare coverage to all its residents, including retired and serving people. employees and their families.The scheme is intended to provide the same benefits that were available under the Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (AB-PMJAY), a Government of India scheme, which provides annual health insurance coverage of Rs 5 lakh per family in a floating and cashless amount through an established network of healthcare providers.
The scheme was introduced with the objective of reducing catastrophic healthcare expenditure and improving access to quality healthcare at home in the UT of J&K.
Eligible beneficiary families under this plan will receive health coverage through a network of Empaneled Health Care Providers (EHCP). The government decided to implement the scheme to provide health insurance to defined categories of eligible families in the UT of Jammu and Kashmir. As a result, the government initiated the bidding process, through the State Health Agency (SHA), by issuing the bidding document and the defendant company turned out to be the successful bidder. Consequently, on March 10, 2022, the between the parties a contract for a maximum period of three years. Since beneficiary families must receive medical coverage through a network of EHCPs, a separate Tripartite Agreement was also signed between the parties and the EHCPs in terms of Clause 6 of the contract.
The contract between the parties will subsist until March 14, 2025, but the defendant, in its letter dated November 1, 2023, notified that it was not interested in a new renewal of the contract after the expiration of the policy period ending on March 14. 2024. In response to the communication of the respondent, the CEO of SHA, through video communication dated November 3, 2023, requested the respondent to continue as per the MoU signed between the parties. However, the video communication between the defendant and the insurance company on November 16, 2023 reiterated that it has decided not to grant consent for contract renewal beyond March 14, 2024 and will not issue any new policy coverage. beyond the coverage period of the existing policy and requested that SHA be given sufficient time to make arrangements so that beneficiaries would not suffer.
The CEO, SHA vide communication of December 7, 2023, again requested the Vice President of the defendant company to reconsider his decision, however, the vide communication of the defendant of December 13, 2023, informed the CEO that he maintains his decision not to continue. Again the petitioner through the CEO, SHA video letter dated December 28, 2023, requested the Vice President of the respondent company to adhere to the terms and conditions of the contract in letter and spirit. However, it was conveyed by the General Manager of the defendant company, through a communication dated January 3, 2024, that the company was only invoking Clause 9.1 (c) of the Insurance Contract.
Finally, the SHA, by invoking Clause 41.3 of the contract, vide communication No. SHA/ABPM-JAY/2023-24/5334 dated January 19, 2024, notified the respondent to refer the dispute to the Arbitral Tribunal. with a request to appoint an Arbitrator on his behalf. The government stated that under the terms of Clause 9 of the contract, the company cannot go back and circumvent the contract for the third year extension and plunge the people of UT into risk and uncertainty.
After hearing the UT lawyers, Justice Rajesh Sekhri observed: “In an overall view of the case, what comes to the fore is that the contract between the parties is not determinable in nature but is covered by the occurrence of demands and eventualities listed therein. Therefore, the Specific Assistance Law is not applicable to the present case. The functions of all Insurance Companies, public and private, are regulated by the Insurance Law and the Regulations that it dictates. Therefore, an insurance contract is subordinate to the legal provisions of the Insurance Law and must be interpreted taking into account public order and public interest, in particular, when it aims to provide a healthcare service to citizens. "“The petitioner has managed to establish a prima facie case for the grant of interim relief in terms of Section 9 of the Arbitration Act and since the contract between the parties is an insurance service, the balance of convenience favors the grant of the court order. Any damages that may be suffered by the State Health Agency, in general, and the beneficiaries of the scheme, in particular, due to alleged breach of contract by the insurer, may not be compensated in the future in terms of money or property. otherwise,” the High Court said.
While allowing the petition, the High Court temporarily ordered the respondent company to continue with the existing agreement as per the terms and conditions of the contract pending resolution of the dispute by the arbitrator.
The high court has now directed general insurance company IFFCO TOKIO to continue with the existing agreement as per the terms and conditions of the contract in respect of Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana-SEHAT (AB-PMJAY-SEHAT) pending the resolution of the dispute with the UT government by the arbitrator.
The direction was approved in a petition filed by the Government of J&K in which it was submitted that the government launched Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana-SEHAT to provide free universal healthcare coverage to all its residents, including retired and serving people. employees and their families.The scheme is intended to provide the same benefits that were available under the Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (AB-PMJAY), a Government of India scheme, which provides annual health insurance coverage of Rs 5 lakh per family in a floating and cashless amount through an established network of healthcare providers.
The scheme was introduced with the objective of reducing catastrophic healthcare expenditure and improving access to quality healthcare at home in the UT of J&K.
Eligible beneficiary families under this plan will receive health coverage through a network of Empaneled Health Care Providers (EHCP). The government decided to implement the scheme to provide health insurance to defined categories of eligible families in the UT of Jammu and Kashmir. As a result, the government initiated the bidding process, through the State Health Agency (SHA), by issuing the bidding document and the defendant company turned out to be the successful bidder. Consequently, on March 10, 2022, the between the parties a contract for a maximum period of three years. Since beneficiary families must receive medical coverage through a network of EHCPs, a separate Tripartite Agreement was also signed between the parties and the EHCPs in terms of Clause 6 of the contract.
The contract between the parties will subsist until March 14, 2025, but the defendant, in its letter dated November 1, 2023, notified that it was not interested in a new renewal of the contract after the expiration of the policy period ending on March 14. 2024. In response to the communication of the respondent, the CEO of SHA, through video communication dated November 3, 2023, requested the respondent to continue as per the MoU signed between the parties. However, the video communication between the defendant and the insurance company on November 16, 2023 reiterated that it has decided not to grant consent for contract renewal beyond March 14, 2024 and will not issue any new policy coverage. beyond the coverage period of the existing policy and requested that SHA be given sufficient time to make arrangements so that beneficiaries would not suffer.
The CEO, SHA vide communication of December 7, 2023, again requested the Vice President of the defendant company to reconsider his decision, however, the vide communication of the defendant of December 13, 2023, informed the CEO that he maintains his decision not to continue. Again the petitioner through the CEO, SHA video letter dated December 28, 2023, requested the Vice President of the respondent company to adhere to the terms and conditions of the contract in letter and spirit. However, it was conveyed by the General Manager of the defendant company, through a communication dated January 3, 2024, that the company was only invoking Clause 9.1 (c) of the Insurance Contract.
Finally, the SHA, by invoking Clause 41.3 of the contract, vide communication No. SHA/ABPM-JAY/2023-24/5334 dated January 19, 2024, notified the respondent to refer the dispute to the Arbitral Tribunal. with a request to appoint an Arbitrator on his behalf. The government stated that under the terms of Clause 9 of the contract, the company cannot go back and circumvent the contract for the third year extension and plunge the people of UT into risk and uncertainty.
After hearing the UT lawyers, Justice Rajesh Sekhri observed: “In an overall view of the case, what comes to the fore is that the contract between the parties is not determinable in nature but is covered by the occurrence of demands and eventualities listed therein. Therefore, the Specific Assistance Law is not applicable to the present case. The functions of all Insurance Companies, public and private, are regulated by the Insurance Law and the Regulations that it dictates. Therefore, an insurance contract is subordinate to the legal provisions of the Insurance Law and must be interpreted taking into account public order and public interest, in particular, when it aims to provide a healthcare service to citizens. "“The petitioner has managed to establish a prima facie case for the grant of interim relief in terms of Section 9 of the Arbitration Act and since the contract between the parties is an insurance service, the balance of convenience favors the grant of the court order. Any damages that may be suffered by the State Health Agency, in general, and the beneficiaries of the scheme, in particular, due to alleged breach of contract by the insurer, may not be compensated in the future in terms of money or property. otherwise,” the High Court said.
While allowing the petition, the High Court temporarily ordered the respondent company to continue with the existing agreement as per the terms and conditions of the contract pending resolution of the dispute by the arbitrator.
