GI Council Warns of Cashless Care Disruption Amid Insurer-Hospital Disputes

With the General Insurance Council (GI Council) demanding that the Association of Healthcare Providers (India) (AHPI) reverse its threat to halt cashless services for policyholders of Star Health Insurance, the dispute between hospitals and insurance firms has intensified once more.

In order to maintain patient care, the council requested that AHPI go back to the negotiation table and participate in a positive manner. AHPI, which represents more than 15,000 hospitals, issued a warning earlier this week that its member hospitals will cease providing cashless care to Star Health subscribers unless Star Health resolves hospitals' complaints by September 22, 2025.

Patients can be admitted and treated in cashless facilities without having to pay in full in advance because the insurer pays the hospital directly. For thousands of consumers, losing that perk would be a huge setback. The Indian non-life insurers' trade association, the GI Council, vehemently disagreed with AHPI's position. It further stated that it fully supports Star Health in this disagreement, arguing that such capricious behaviour jeopardises policyholders' interests and runs the danger of eroding confidence in the health insurance system.

AHPI Already Warned Various Other Insurance Providers

It is not the first time that AHPI has shown its strength. It had already issued similar warnings against Niva Bupa Health Insurance, Care Health Insurance, and Bajaj Allianz General Insurance only this month.

Charges of payment disputes and claim rejections are at the heart of the controversy. One thing is certain as the tug-of-war goes on: patients are caught in the middle. Trust in India's health insurance system runs the risk of being severely harmed if insurers and hospitals cannot reach an agreement.

With 13,308 complaints against it in FY2023–24, Star Health & Allied Insurance was the most frequently complained about company, according to the Council of Insurance Ombudsman’s annual report. A resounding 10,196 of these complaints were particularly about policyholders' claims being rejected in whole or in part.

Why AHPI has Taken This Step?

Star Health has been charged by AHPI with continuously pressuring hospitals to reduce tariffs at the expense of patient care. Additionally, it claimed that the insurance occasionally removes cashless services from hospitals without warning and imposes inexplicable deductions from claims that have already been granted.

According to the group, "patients and their families have suffered greatly as a result of such practices." Conversely, insurers contend that hospitals are arbitrarily raising treatment prices and inflating bills. They assert that a large number of hospitals refuse to defend their prices, forcing insurers to foot the bill. The GI Council claimed to have tried mediation before.

On September 2, a meeting with AHPI was planned to address the problems. AHPI, however, rescheduled the discussions until a later time, which has not yet been determined.  According to the council, AHPI has nevertheless moved forward with its unilateral approach, indicating a preference for disruption over cooperation in order to enhance customer service and safeguard the interests of patients.