About four months ago, hospitals and health insurance providers were involved in a public spat over cashless insurance, tariffs and common empanelment, among other issues.

The Association of Healthcare Providers of India (AHPI) issued advisories, calling on members to suspend supporting cashless claims from providers including Bajaj Allianz General Insurance, Care Health Insurance and Star Health. On their part, the health insurance providers pushed back, pointing to high hospital treatment charges and called for standardisation of protocols.

After a flurry of statements from both sides, the issue has since fallen silent, and a fragile peace is in place. Healthcare industry representatives say they are working with health insurance counterparts to iron out the wrinkles; insurance providers, when contacted, said the issue has been resolved.

But the issue continues to simmer beneath the surface, say medical practitioners, pointing to difficulties on the ground in implementing treatment “packages”, thereby blunting the effectiveness of cashless insurance for the patient, whose voice is unheard in this imbroglio.

Pointing to a truce, AHPI Director General Dr Girdhar Gyani says there is continuing dialogue with the General Insurance (GI) Council; and two health insurance providers are represented at AHPI’s governing council meetings on health insurance.

Hospitals are getting on board the common empanelment system and an “experiment” has been started for new hospitals — tariffs are fixed following discussions between the hospital and a couple of health insurance providers, and this would apply across the 30-plus insurers, he said.

There are problem areas, a “stalemate” in some cases, he admits, where the rate offered by the insurance companies to new hospitals is low. “We talked to the GIC and the formula depends on the infrastructure of the new hospital and location... look at the tariff... offered to the neighbouring hospitals. Based on that, you fix the tariff rather than on ad hoc basis (sic).”

There still is no good formula, says Gyani, adding that they are working on it. “But at least there is a good beginning and some of the hospitals have already got into the common empanelment,” he adds.

Health insurance representatives had, during the public spat, called for greater tariff transparency from hospitals. Following a meeting in Delhi in October, expert committees were formed to address the issues, and these would be discussed further at the next GI Council meet in Mumbai, possibly in late-January or February, he said, adding that representatives from the GI Council and AHPI expect to meet every quarter to iron out issues.

Known unknowns

There are other known unknowns and unknown knowns, when healthcare and insurance cross paths.

The unknown in the pack, for example, is the impact of the recently approved 100 per cent foreign direct investment in insurance, observes Gyani.

But “cashless everywhere” is an issue that is already in the Supreme Court. The aim was to make it easy for a patient to get health insurance cover — irrespective of whether the hospital she or he goes to is covered by the insurance provider.

Dr AK Ravikumar, former Chairman of the Indian Medical Association’s (IMA) Hospital Board of India, says the pursuit of tariff “packages” makes it difficult for patients to get treatments of their choice.

The equation is between the health insurer and the policyholder paying the premium, he says, calling for hospitals and “packages” to be kept out of the discussion.

Policyholders should be given a clear information sheet explaining what they are eligible for to help them make an informed choice when going in for a more expensive treatment, he explains. Fixing a treatment package, say, for an appendicitis surgery does not take into account variables, including age, medical complications, underlying illnesses, and so on, he says, and could push a hospital or nursing home to undercut on expenses elsewhere.

Fixed-cum-variable cost

The aim of “cashless everywhere” services is for patients to access treatment from a doctor of their choosing but this is affected due to the insistence on “packages”, says Ravikumar, President-elect, IMA-Tamil Nadu. An acceptable approach is to have a fixed cost (room/ theatre/investigation charges, and so on) and variable cost (number of hours of surgery/ days in hospital, for example), he says.

Patient advocacy voices, meanwhile, call for greater transparency from both hospitals and health insurance providers to reduce the burden on premium-paying policyholders when it comes to hospitalisation and getting the insurance payment claimed for their treatment.

Published on December 29, 2025