How do medicep work?

My father recently got admitted for a lung disease and we applied for the insurance via medicep. Medicep have packages for diseases/treatments instead of the whole final bill settlement. The package was shown as around 30k for 5 days of hospitalization. The final bill for came to be around 80k. The hospital asked us to pay 20k , and then said we'll have to settle up rest if medicep rejects or partially settles the final bill. There is no way the insurer is going to pay the remaining 60k. But to our surprise they settled it. For the past, we have used medicep and they haven't paid a single rupee greater than their package amount. In fact not even the full package amount was released. I'm happy, but just confused.