More than 15,000 hospitals across the country have withdrawn from their cashless treatment agreements with insurance companies, a move that will directly impact lakhs of patients relying on health insurance during medical emergencies.
The decision, effective from September 1, has been taken due to growing disagreements between hospitals and insurers over treatment costs and reimbursement delays. The Association of Healthcare Providers of India (AHPI) has issued directives to its member hospitals, including top private chains like Max Super Specialty and Fortis Escorts, to suspend cashless facilities for certain insurers.
Why are hospitals unhappy?
Hospitals allege that insurance companies are refusing to revise treatment rates in line with rising healthcare costs. According to AHPI, medical expenses in India rise by 7–8% every year due to factors like staff salaries, medicines, equipment, electricity, and other operational costs. However, insurance firms continue to pay hospitals at outdated rates, leading to financial strain.
Insurers such as Bajaj Allianz & Care Health Insurance are under the radar.
Hospitals claim these companies delay claim settlements, causing discharge approvals to get stuck.
Bajaj Allianz, in particular, has allegedly rejected repeated demands to revise treatment rates every two years.
The trigger: Common Empanelment Agreement
The dispute escalated after insurance companies introduced a new Common Empanelment Agreement. Under this framework, small and big hospitals are paid the same amount for identical surgeries, something that big hospitals argue is unfair given their differing operational costs.
Impact on Patients
Patients holding policies from Bajaj Allianz or Care Health Insurance will now have to pay hospital bills upfront and later seek reimbursement from the insurer. People have to submit documents such as the discharge summary, prescriptions, test reports, Aadhaar, PAN, and bank details for claim settlement.
If the standoff continues, more insurers could face suspension of cashless facilities, further inconveniencing policyholders.
