Blitz Bureau
NEW DELHI: A dispute between hospitals and insurers over cashless health insurance services has once again highlighted the fragility of India’s health financing ecosystem, raising concerns about transparency, affordability and patient protection.
Advisory sparks concern
In August, the Association of Healthcare Providers of India (AHPI), representing nearly 20,000 hospitals, advised members to suspend cashless services for Bajaj Allianz from September 1. The move was triggered by disputes over abrupt stoppage of services, delays in empanelment, deductions in approved bills and pressure on doctors to prescribe cheaper medicines and implants.
Hospitals said treatment tariffs had not been revised in years despite medical inflation rising at 12-13 per cent annually. After urgent talks with the insurer, AHPI withdrew its advisory, but the episode revealed deep mistrust between hospitals and insurers.
Hospitals cite inflation and delays
Hospitals argue that delayed reimbursements, post-authorisation deductions and interference in clinical decisions are threatening their financial stability. They maintain that pressure to cut costs compromises treatment quality and undermines the doctor-patient relationship.
The General Insurance Council (GIC), representing insurers, condemned AHPI’s unilateral action, calling it damaging to consumer confidence. Insurers insist that hospitals often inflate bills or prescribe unnecessary procedures, driving up claim costs and premiums.
They have urged wider adoption of reforms such as the “Cashless Everywhere” initiative, which allows policyholders to access cashless treatment at any hospital with pre-approval, and the National Health Claims Exchange (NHCX), a digital platform to standardise and speed up claim settlements.
Regulator steps in
The Insurance Regulatory and Development Authority of India (IRDAI) has issued strict service-level rules requiring insurers to approve admissions within one hour and clear discharge requests within three hours. If deadlines are missed, insurers must bear additional charges.
Meanwhile, NHCX is being rapidly expanded, with more than thirty-four insurers and hundreds of hospitals already connected. The platform is expected to make claims more transparent and efficient.
Patients bear the brunt
For policyholders, the uncertainty is unsettling. In FY24, insurers settled 2.69 crore claims worth nearly ₹83,500 crore, with 58 per cent processed cashlessly. Yet 11 per cent were rejected and six per cent were pending.
Even a brief suspension of cashless services can force patients to pay large hospital bills upfront and seek reimbursement later, defeating the very purpose of health insurance and placing families under severe financial strain.
Experts recommend that policyholders confirm hospital tie-ups with their insurers, understand policy coverage in detail, and inform insurers in advance for planned admissions. Keeping documents in order, setting aside some emergency funds, and escalating disputes promptly through IRDAI’s Bima Bharosa portal or the ombudsman are considered essential safeguards.
Both AHPI and GIC are in talks to create a transparent tariff-setting and empanelment framework. Analysts believe that only standardised pricing, digital claim platforms and stricter oversight will restore confidence in the system.
For policyholders, the expectation remains straightforward: access to healthcare that is timely, cashless and free of avoidable stress.