New Delhi: Top private hospitals, including Fortis, Max and Medanta, may discontinue cashless treatment under the Central Government Health Scheme (CGHS) and Ex-servicemen Contributory Health Scheme (ECHS) within December.
With the government yet to settle dues totalling Rs 1,700 crore, the hospitals claim to be hard-pressed for resources, saying the funds crunch is affecting day-to-day functioning.
Over 37 lakh people are entitled to cashless treatment under the two schemes, which are meant to ease public access to quality healthcare. If the cashless facility is withdrawn, beneficiaries will be charged the discounted rates outlined under CGHS and ECHS and then be reimbursed by the government. At present, the government reimburses the hospitals.
Starting Thursday, hospitals across India, including superspeciality chains such as Max, Fortis, Apollo, B.L. Kapur, Narayana Health and Medanta, are meeting to decide how long to continue cashless treatment.
“We are likely to announce total withdrawal from cashless at a press meet by the third week of December,” said Dr Girdhar J. Gyani, director general of the Association of Healthcare Providers (India), which represents 2,500 speciality and 8,000 smaller hospitals across India.
“From today, we have started holding meetings across India to reach a final consensus.”
Dr V.K. Monga, chairman of the Indian Medical Association Hospital Board of India (IMA HBI), which represents 50,000 facilities enrolled under the government schemes, said “hospitals are bleeding”.
“We may decide on a complete exit from the scheme as many hospitals are contemplating de-empanelment,” he added.
The hospitals AHPI and IMA HBI represent include Fortis, Max, Apollo and Medanta.
According to AHPI data, out of Rs 1,700 crore, the government had checked the authenticity of claims to the tune of Rs 1,000 crore and approved payment. But the money is yet to reach hospitals.
ThePrint reached the union health ministry spokesperson for comment, but was yet to receive a response until the time of publishing.
However, a senior official, who did not want to be named, said the ministry had “sent a request to the finance ministry for allotment of funds to the tune of Rs 1,000 crore to clear dues under CGHS”. “We are awaiting a response,” the official added.
An additional Rs 3,500 crore have been sought under ECHS, Minister of State for Defence Sripad Naik told Parliament last month.
Fortis, Max, Apollo biggest creditors
CGHS is one of the oldest health insurance schemes, launched in 1954 to provide health insurance coverage to 32 lakh central government employees and pensioners.
ECHS, a flagship scheme of the defence ministry, was launched in 2003 to provide healthcare assistance to more than 5.5 lakh former servicemen and their dependents.
It is structured on the lines of CGHS and both schemes are financed by the central government.
According to AHPI data updated until October, the Delhi-NCR-based Fortis Hospital and Max Healthcare are the top creditors, followed by Chennai-based Apollo Hospitals.
The government owes Rs 270 crore to Fortis. The dues for Max Healthcare, Apollo Hospitals and Medanta stand at Rs 216 crore, Rs 140 crore and Rs 95 crore, respectively.
“There is anguish among hospitals. Their financial sustainability has taken a hit,” said Gyani. “Many hospitals have retrenched their staff as there is no money to release salaries.”
Hospitals say they have been continuously chasing government authorities for pending payments, but to no avail.
“Max Healthcare has been constantly following up with government officials regarding its dues from CGHS,” said a hospital spokesperson. “The assurances regarding payments have not been met so far and the dues continue to mount. The current outstanding with CGHS is over Rs 150 crore.”
The government’s inability to release payments is putting pressure on the balance sheets of hospitals.
“This has created a tough cash-flow situation and we are finding it difficult to pay our vendors, suppliers and partners,” the Max Healthcare spokesperson added.
“This has led to problems in the seamless management of the hospital’s supply chain. We are finding it difficult to cope with this huge burden, which continues to grow by the day,” the spokesperson said. “Keeping the interests of CGHS beneficiaries in mind, we are continuing to treat them on a cashless basis.”
In October, Delhi-based Pushpawati Singhania Hospital and Research Institute (PSRI) exited from the CGHS panel over similar concerns, and several other hospitals are said to be planning to cut off their association with the scheme. Six years ago, Apollo Hospitals also exited CGHS, but their dues are still pending.
“Several reputed hospitals are discussing the exit route,” said Monga of the IMA HBI. “We may not be able to share the names right now as the discussions are going on.”