In a case where the insured had undergone cataract surgery using multifocal lenses and made an insurance claim to an insurer, Kim & Chang represented the insurer and won the final judgment at the Supreme Court on June 16, 2022.  If an insurance policyholder receives treatment with “hospitalization,” he or she can often collect a large amount of insurance in accordance with the terms and conditions.  However, as we successfully argued that cataract surgery is a simple surgery that does not require “hospitalization,” the insurance company was able to win the case, which is expected to have a significant impact on similar cases in the future.

Earlier this year, the Seoul High Court ruled that the cataract surgery operated on the insured was not an inpatient treatment but an outpatient treatment.  We argued that a cataract surgery is not subject to the payment of insurance proceeds premised on hospitalization, on the following grounds: (i) the cataract surgery generally does not require more than six hours of continuous observation or management by medical staff via hospitalization; and (ii) it actually took only about two hours from preparation to completion of the surgery, and the insured did not show any side effects or other medical issues requiring post-operative observation or management by a doctor.  These arguments were accepted by the Seoul High Court, which were in turn upheld by the Supreme Court.

The insured argued that the substance of cataract surgery can be regarded as a treatment needing hospitalization, regardless of whether the substance of treatment is in fact inpatient treatment, because cataract surgery is subject to the pricing under the diagnostically related group system (the “DRG system”), which is a pricing method generally premised on “hospitalization”.  However, our firm’s insurance litigation team, with the assistance of the health care team, successfully argued that (i) a cataract surgery does not meet the requirements for hospitalization as it does not require observation or management by medical staff for more than six hours, and the Ministry of Health and Welfare exceptionally applies the DRG system to cataract surgery only for policy reasons (not because it requires hospitalization); and (ii) the Supreme Court ruled that an inpatient treatment would be required if the patient had to receive treatment under the observation and management of medical staff for more than a certain period of time within the medical institution, taking into account the symptoms and conditions of the patient and the contents of the treatment that the patient should receive.  As a result, the Supreme Court ruled that the cataract surgery cannot be claimed for insurance on the premise of “hospitalization,” regardless of the application of the DRG system.

The amount of insurance claims for cataract surgery was about KRW 78 billion in 2016, but after only five years, it increased sharply to about KRW 1 trillion in 2021.  The decision is expected to have a significant impact on such claims as well as other cases where there are insurance “leakages” from claims for insurance proceeds based on hospitalization, even though the treatment does not require hospitalization.