General Insurers Public Sector Association [GIPSA] rates

A vast majority of the patients, getting admitted to the hospitals avail of cashless treatment by virtue of having been insured with one of the health insurance companies like the United India Insurance, Oriental Insurance, National Insurance or New India Insurance on payment of premium.

These insurance companies were empaneling hospitals and reimbursing for the services utilized by their clients at the negotiated hospital rates.

However of late, the above mentioned four insurance agencies have got together and are dictating the reimbursement rates, commonly referred to as GIPSA rates which in many case is less than the cost incurred by the hospitals in rendering the services. This jeopardizes the quality of care and safety of the patients, which is totally unacceptable.

When this fact was brought to the notice of the insurance companies by the Private Hospitals & Nursing Homes Association [PHANA] and the Federation of Healthcare Associations of Karnataka [FHAK] it was followed by elaborate discussions between them and it was mutually agreed upon to reimburse at rack rates of the hospitals at a meeting in May 2019.

However the insurance companies have now failed to live up to the agreement and are insisting on the GIPSA rates which are unviable and affecting the sustainability of the hospitals.

Central Government Health Scheme [CGHS] rates

Added to this the Indian Healthcare industry is passing through a period of crisis as a result of the CGHS and ECHS. Thousands of crores of rupees are due to be paid by CGHS/ ECHS to private hospitals (eg dues to 9 hospitals amounting to Rs 650 Crore). The outstanding is pending for past several months and no interest is being paid on such outstanding, which is taking a toll on the day to day functioning of the hospitals. Hospitals are unable to even pay salaries to the employees. If the situation is allowed to persist, it is feared that lakhs of hospital employees will lose their jobs. The hospitals having been pushed to the brink of unsustainability, will be constrained to suspend cashless services for the beneficiaries of CGHS/ ECHS in order to survive. Further, the package rates under CGHS have not been revised since 2014, and also the agreed upon terms and conditions as in the MoU between the Government and the hospital is not being honoured. Whereas the hospital expenses continue to grow to match inflation related expenses.

As a result of this the hospitals are being put to immense hardships and are unable to sustain themselves.

As per the costing study conducted by the Govt. and also other organizations, it has been shown that the CGHS package rates, on an average cover only around 40% of the total expenses incurred by the hospital in rendering services to the CGHS beneficiaries. Such an environment is not conducive to the viability of any hospital and in the long run will seriously affect the entire healthcare services of our country. This has far reaching effects as all public sector undertakings and banks follow the CGHS rates which is considered as the mother of all schemes.

Ex-Service men’s Contributory Health Scheme [ECHS]

Similarly the ECHS which follows CGHS rates has a huge backlog of payment to hospitals which is severely affecting very existence of the hospitals.

We have bought this to the notice of CGHS & ECHS officials and also the pensioners association have been informed of the same. If we do not receive a response immediately in this regard, we will be forced to stop cashless treatment.

This press conference is being organized by Indian Medical Association (IMA), Association of Healthcare Providers India (AHPI), Federation of Healthcare Associations Karnataka (FHAK) and Private Hospitals & Nursing Homes Association (PHANA)