Over 600 private hospitals have opted out of Ayushman Bharat since 2018

Private players say lower rates, delayed dues hampering participation in the scheme

Over 600 private hospitals have voluntarily opted out of the Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) since the scheme’s inception in 2018 due to various reasons, including delayed dues and low reimbursement rates.

 

Gujarat topped the list with 233 hospitals that left the scheme, followed by Kerala at 146 and Maharashtra at 83.

 

According to data shared by the Minister of States for Health Prataprao Jadhav in Rajya Sabha, a total of 609 private hospitals have opted out since the inception of the scheme. 

 

The AB-PMJAY scheme, which provides a health insurance cover of Rs 5 lakh per family, currently empanels 31,805 hospitals across India, of which 14,394 are private sector institutions.

  While the empanelment of private hospitals is entirely voluntary under PMJAY, many private and corporate hospitals have been highlighting challenges in the scheme’s viability and the need for regulatory reforms to increase private sector participation.

  Commenting on the same, an industry source pointed out that corporate hospitals have been hesitant to join due to low reimbursement rates and high operational costs.

  Girdhar Gyani, director general, Association of Healthcare Providers of India (AHPI), added that some facilities in general and tertiary care in particular face challenges related to reimbursement rates and delay in getting payment, which have direct impact on financial sustainability.

 

The ministry added that apart from package rates, the reasons for hospitals voluntarily opting out of the scheme include empanelment only for the Covid period, hospitals being closed or non-functional, changes in hospital entity, relocation and shortage of nursing staff and specialist doctors among others. 

 

However, several private hospital associations complained of lower rates and delays in reimbursement related to procedures performed under the scheme.

 

Last month, the Haryana unit of the Indian Medical Association (IMA) called for the suspension of services under the AB-PMJAY in February, citing the government’s failure to clear pending reimbursement payments to the tune of Rs 400 crore since last year.

 

Similar suspension calls have been made by private hospital and nursing home associations in Punjab and Jammu and Kashmir as well.

 

Private players are also opting out due to certain treatment packages being reserved for public hospitals only in states such as Chhattisgarh and Gujarat, and no referral from public hospitals.

 

“The National Health Authority (NHA) has laid down guidelines for payment of claims to hospitals within 15 days of claims submission for intra-state hospitals and within 30 days of portability hospitals (located outside state),” Minister of States for Health Prataprao Jadhav said in his response to query in the Rajya Sabha.

 

Scheme's expansion eroding margins for hospitals

 

Launched in October 2018, the scheme initially covered around 107.4 million poor and vulnerable families, comprising the bottom 40 per cent of India’s population, according to the Socio Economic and Caste Census (SECC) of 2011.

 

The beneficiary base was later revised to 550 million individuals, or 123.4 million families in January 2022.

 

In 2024 alone, the scheme was expanded to cover 3.7 million ASHAs and anganwadi workers and their families for free healthcare benefits, with the year ending with the government’s announcement to include around 60 million senior citizens aged 70 years and above.

 

Later, Odisha and Delhi became the 34th and 35th state or union territory (UT) to join PMJAY, adding over 7 million families under the scheme’s fold.

 

Gyani added that while the expansion of PMJAY has increased healthcare access for millions, it also brings operational challenges for smaller hospitals.

 

“Such institutes often operate on tight margins and the added pressure of accommodating a larger patient base could potentially strain their resources,” he added.

 

An industry insider explains that during the initial phase of the scheme, there were about 70 per cent of patients coming through cash or private insurance and 30 per cent were through PMJAY.

 

“It was a model where there was an element of cross subsidy and hospitals were able to sustain,” he added.

 

Now that trend has changed to 70 per cent patients coming through PMJAY, and with low rates and problems related to delayed payment. This is impacting financial sustainability for small hospitals.

 

Another major issue is deduction of payments. An official associated with a Kurukshetra- based PMJAY empanelled hospital said that hospitals are only receiving 10 to 15 per cent of their claimed payments in many cases, with the rest being deducted without giving any reasons.

 

“While scrutinisation of claims is important, such delays can erode at least 15 to 16 per cent of a hospital’s profit margins,” said another administrator of a Gurugram-based hospital.

 

Private players ask for transparent payment process

 

In March last year, the health ministry had constituted a high-level committee under the chairmanship of VK Paul, member, NITI Aayog to look into improving implementation of PMJAY, including private participation.

 

Industry sources, who were part of these meetings, indicate that private bodies had raised issues of scaling the scheme by increasing acceptability among frontline quality providers in the private sector and allowing fixed capacity of hospitals.

  Suggestions included recovery of the fixed and variable costs incurred for every PMJAY patient by the empanelled institutions, a transparent commitment to pay on time, and real-time status on claim reimbursements.

 

Gyani said that introduction of a clause of 1 per cent interest in case payment to hospitals gets delayed more than one month was also discussed.

 

“Collaborative models, including Public-Private Partnerships (PPP), would only play a role in addressing key challenges while ensuring accessibility and affordability, more so when 85 per cent tertiary care beds are with the private sector,” Gyani added.

 

The committee is yet to come out with a report, with private hospitals still waiting for an outcome.