AHPI warns Star Health it may halt cashless service over 'unfair practices'

The Association of Healthcare Providers–India (AHPI), which represents over 15,000 hospitals and healthcare institutions nationwide, has accused Star Health Insurance of indulging in unfair practices and warned that its member hospitals may suspend cashless services for the insurer’s policyholders starting September 22.

 

In a strongly worded communication sent to the insurer, AHPI flagged long-standing grievances, including the refusal to revise hospital tariffs in line with rising healthcare costs, pressure to further cut already outdated rates, arbitrary withdrawal of cashless facilities, unjustified deductions from bills, and claim rejections even after final approvals.

 

AHPI cautioned that these practices not only undermine hospitals’ financial sustainability but could also compromise patient safety and quality of care. 

“The systemic failure of Star Health Insurance to address legitimate grievances, combined with their unfair practices, leave us with no choice but to take appropriate action,” said Girdhar Gyani, director general of AHPI.

 

“Our primary responsibility is to safeguard the interests of both patients and healthcare providers. No insurer should be allowed to jeopardise patient care or undermine the viability of hospitals for commercial gain,” he added.

 

The association pointed to the Insurance Ombudsman Annual Report 2023-24, which showed Star Health topping the list of consumer complaints with over 13,300 cases in FY24. More than 10,000 of these were linked to partial or full claim rejections, exceeding the combined complaints against the next four largest health insurers.

 

If cashless services are suspended, AHPI said, its member hospitals will continue to treat Star Health policyholders, but patients will have to pay upfront and later seek reimbursements directly from the insurer.

 

Despite the warning, AHPI stressed that hospitals remain committed to supporting affected patients by facilitating alternate payment and reimbursement channels. The body reiterated its willingness to engage with Star Health for a “constructive resolution in the best interests of patients and providers.”

 

Responding to the communication by AHPI, Star Health clarified that it has not received any instance of cashless suspension from its network partners with whom it has bilateral agreements.

 

The company said AHPI’s threats of suspension were arbitrary, lacking in clarity, and risked creating unnecessary confusion for policyholders at a time when the government is promoting health insurance by exempting GST.

 

“We reassure our customers that their access to healthcare through Star Health Insurance will not be impacted. Even in the unlikely event of suspension, we will ensure that claim payments are made before customers pay the hospital,” a Star Health spokesperson said.