Hospitals across India are facing a major crisis after Star Health Insurance denied cashless treatment facilities to many members of the Association of Healthcare Providers of India (AHPI), including some of the country’s largest tertiary care chains, the association has said.
In a statement issued on Monday, AHPI has asked Star Health to immediately restore cashless services in all affected hospitals and expedite the empanelment of new institutions. Only then, it said, can patients be assured of uninterrupted access to medical care and spared unnecessary financial and emotional distress.
AHPI said this suspension has left hospitals dealing with angry and distressed patients who are shocked to find that the most basic benefit of their health insurance—cashless admission and treatment—is no longer available. Hospitals and nursing homes under the Indian Medical Association’s Hospital Board are reporting the same problems, it said.
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The situation has been made worse by Star Health’s slowdown, and in many cases outright stoppage, of new hospital empanelments, AHPI alleged. This means that patients in several regions are being denied wider access to cashless treatment facilities. Together, these two moves—suspending existing cashless services and blocking new empanelments—are not only creating avoidable hardship for patients but also shaking public confidence in the health insurance system, AHPI said.
AHPI has clarified, in response to the General Insurance Council’s (GIC) press statement, that its stand is neither arbitrary nor unilateral. Instead, it is a direct and necessary reaction to the arbitrary actions of Star Health in de-empanelling hospitals and withdrawing cashless facilities without adequate consultation. While AHPI remains open to dialogue with all stakeholders, it has made clear that the welfare of patients must come first.
The General Insurance Council (GI Council) had asked the AHPI to withdraw its threat to suspend cashless services for Star Health Insurance policyholders. The council asked AHPI to return to the negotiating table and engage constructively to ensure uninterrupted care for patients.
Information available with AHPI shows that cashless facilities have been suspended in several leading hospitals, including Care Hospitals in Ramnagar and Vizag, Manipal Hospitals in Delhi and Gurugram, Max Hospitals across North India, Metro Hospital in Faridabad, Medanta Hospital in Lucknow, Rajiv Gandhi Cancer Hospital in New Delhi, Sarvodaya Hospital in Faridabad, and Yatharth Hospitals.
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Further, Star Health has denied empanelment to many prominent institutions, including Care Health City in Vizag, Care Hospital in Malakpet (Hyderabad), Fortis Hospital in Manesar, Jupiter Hospital in Indore, Max Hospital in Dwarka, and Medanta Hospital in Noida, among others, AHPI alleged. This refusal has forced patients into the reimbursement route, which not only delays treatment but also defeats the very purpose of health insurance, it said.
Girdhar Gyani, director general, AHPI and Abul Hasan, chairman, IMA Hospital Board, in a joint statement, said “Patients buy health insurance with the clear expectation of receiving cashless treatment at quality hospitals. It is unjust for insurers to withhold this facility after collecting premiums, leaving families to scramble for funds at the time of hospitalization. Patients deserve seamless access, and hospitals deserve fair treatment as service providers. Star Health must act urgently to restore trust and ensure that its insured members are not penalized for choosing the hospitals best suited to their medical needs.”
In a statement, Star Health and Allied Insurance said, “we have not received any case of cashless suspension from our network partners with whom we have bilateral agreements. AHPI has chosen to issue threats of suspending cashless services in a manner that is arbitrary, lacking clarity or actionable details.”
“AHPI’s abrupt press statement has only prejudiced the interests of policyholders across the country and created unnecessary confusion at a time when the government is promoting healthcare as a basic necessity by exempting GST on health insurance,” Star Health said.
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“We reassure our customers that their access to healthcare through Star Health Insurance will not be impacted. Even if this were to happen, we will ensure that customers get their claim payments before paying the hospital,” it said.
The larger problem lies in the widening gap between rising medical costs and insurance payouts. Hospitals point out that prices of medical consumables, equipment, and staff salaries have surged in recent years. Yet, insurers have not revised their approved treatment rates in line with inflation. Hospitals also complain of abrupt rejection or reduction of claims, which leaves them in a financial bind and patients stuck with unexpected bills.