Workmen Compensation

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Medically Necessary is an important term capitalized in a worker compensation policy. The medically necessary term relates to either of the services or the supplies provided when the insured is in the hospital. These services or supplies are given for identifying or treating the sickness or the injury.

In workmen compensation insurance, ‘medically necessary’ for the insured can arise due to the following incidents:

  • Any treatment
  • Test
  • Medication
  • Stay in Hospital
  • Part of stay in Hospital

Medically necessary services or supplies are helpful in the following scenarios:

  • Medical management of the ‘Illness’ suffered by the insured
  • Medical management of the ‘injury’ suffered by the insured

In workmen compensation insurance policy, it is important that the insured gets the required amount and intensity of the treatment and care for the given illness and injury.

Additional Read: What Are the Different Type of Medical Expenses Covered Under A Workmen Compensation Policy?

The ‘medically necessary’ should not exceed the level of necessary care. In the case of illness and injury, a person is provided with a safe, adequate and appropriate medical care. It is important that this does not include any unnecessary requirements for that illness or injury concerning its duration or intensity.

One other important clause in workmen compensation insurance states that the medically necessary for any illness or injury must be prescribed by a Medical Practitioner.

There are a set of rules and standards which are put forth by the international medical practice. The medical community in India has also put forward a set of rules and regulations. It is important that the ‘medical necessary’ stated by the insured should comply with the widely accepted professional standards.

Case study:

A manufacturing company located in Delhi had about 50 workers on site in the production department. All the manufacturing activities took place on the site day and night. Once, a fire caused by a short circuit in the electric board burnt three workers. They were immediately rushed to the hospital. All three workers were treated by a medical practitioner for the burns and bruises and were discharged after seven days of hospitalization.

The manufacturing company had purchased a worker compensation policy. They immediately approached the insurance company, and a surveyor was sent for investigation. The surveyor noted the following facts:

  • Injury/ burns to the workers were caused on site due to the fire caused by a short-circuit in the electric board.
  • The workers were treated for their burns, and proper tests were carried out related to the same injury.
  • After completion of the medication process, the workers were discharged from the hospital with the consent of the Doctor.

As all these facts signified the ‘medically necessary’ conditions in the worker compensation policy, the claim settlement was successfully done by the insurance company. Thus, the manufacturing firm benefitted from getting its workers insured with this policy.

A twist, in this case, would have been:

If one of the workers was treated not only for his burns but was also operated for a broken wrist. Since this worker had only suffered burns due to fire in the company, he should be treated for the same while being hospitalized. If he was also treated for his broken wrist which had nothing to do with the fire in the company, such costs cannot be claimed under workmen compensation policy.