15K hospitals to suspend cashless services for Bajaj Allianz policyholders

Hospital body issues notice to Care Health Insurance; says low rates, heavy deductions behind move

Citing low reimbursement rates and arbitrary payment deductions, the Association of Healthcare Providers-India (AHPI) on Friday said that it has advised member hospitals in north India to stop providing cashless treatment facilities for policyholders of Bajaj Allianz General Insurance Company with effect from September 1, 2025.

 

There are over 15,000 member hospitals, including Max Healthcare and Medanta, which would now stop cashless treatment by the insurer.

 

The decision came in the wake of AHPI member hospitals raising repeated complaints of unilateral deductions by the company, delay in payments and unduly high time taken for issuing pre-auth and pre-discharge approvals.

 

“In addition, member hospitals complained that Bajaj Allianz has refused to revise hospital reimbursement rates in line with the rising medical costs, pressuring hospitals to further reduce tariffs that were agreed upon years ago under now expired contracts,” the body said in a public statement. 

 

The not-for-profit organisation currently boasts around 15,200 members and affiliate hospitals, of which it claimed a majority, including big-ticket players such as Max Healthcare, Medanta and PSRI, have decided to suspend cashless services for Bajaj Allianz policyholders.

 

The hospital body added that while providers have been advised to temporarily suspend cashless services for customers of Bajaj Allianz until fair and sustainable tariff agreements are reached, member hospitals shall continue to provide treatment to their policyholders at self-pay rates, who shall seek reimbursement from their insurer on post-basis.

 

The AHPI added that a similar notice has been served to Care Health Insurance on Friday, seeking response by August 31. 

 

“Failing this, our member hospitals will be constrained to discontinue cashless services to the Care Health Insurance beneficiaries as well,” the hospital body added.

 

Commenting on the rationale behind the decision, Girdhar Gyani, director general at AHPI, said that medical inflation in India consistently hovers around 7 to 8 per cent per annum, driven by increase in people costs, higher prices of medicines, consumables, utilities and other overheads. 

 

“While we continuously strive to improve efficiency and control costs, continuing at outdated rates, let alone lowering them, is unsustainable and risks compromising patient care, something AHPI and its members will not accept,” he added.

 

The hospital body said that it has consistently proposed that tariffs be reviewed every two years in line with medical inflation, ensuring that hospitals can sustain operations without compromising standards of treatment. 

 

“Unfortunately, Bajaj Allianz has not only rejected reasonable requests for rate revisions but has also sought further tariff reductions, creating an unsustainable situation for healthcare providers,” it added.

 

Meanwhile, Head of Health Administration Team, Bajaj Allianz General Insurance, Bhaskar Nerurkar, expressed surprise following the announcement. 

“We are surprised by this announcement. At Bajaj Allianz, we have always believed that policyholders should receive the best possible hospitalisation experience with fair rates, seamless claims and quality service. Also, we proactively engage with all hospitals to settle any queries or dues from our side. We are confident of working amicably with AHPI and its member hospitals to arrive at a solution that is in the best interests of our customers.”