New Delhi: Amid the suspension of cashless services by health insurers at various hospitals across India, the General Insurance Council (GIC) has begun working on the implementation of a uniform tariff framework, with a single tripartite agreement between a hospital, insurers, and the council, standardising packages, rates, and agreements across the industry. This means each hospital will have the same agreement with every insurer.
Known as the “common empanelment” model, this is being done on the advice of the Insurance Regulatory and Development Authority of India (IRDAI).
On 30 January, the insurance regulator issued a circular directing all health and general insurers offering indemnity-based health insurance to cap annual premium hikes for senior citizens at 10 percent, following a flood of complaints about skyrocketing rates.
The same circular also included an advisory: Insurers must take steps for the common empanelment of hospitals and negotiate package rates on the lines of the Centre’s flagship Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (PMJAY).
Standoff between big private hospitals & insurers
For the past couple of months there have been disputes on tariff between hospitals and insurers. On 16 August, Niva Bupa, one of India’s largest health insurers, suspended cashless services at all Max Hospitals nationwide after failing to strike a fresh rate agreement.
Its contract with Max had lapsed in May, and despite negotiations, no consensus was reached; by 1 September, Max had disappeared from Niva Bupa’s network list.
But a Max Hospitals statement said: “Max Healthcare has continued to provide cashless services to Niva Bupa policyholders even though the contract expired in May 2025. Niva Bupa has asked Max Healthcare to further reduce tariffs, which are already pegged at 2022 levels. Max Healthcare believes that any further reduction is unviable and could compromise patient safety and the quality of care. To support patients, Max Healthcare has set up an express desk to help them claim reimbursements from insurers without having to make upfront payments at Max Hospitals.”
A Max Hospitals spokesperson told ThePrint: “Every two years, the contract between the hospital and the insurer is renewed with revised tariffs.” Max clarified that even after the agreement expired, the hospital continued to provide cashless services at the older rates.
The dispute became widespread when the Association of Healthcare Providers of India (AHPI), which represents more than 15,000 private hospitals including Apollo, Fortis, Max, Medanta, and Manipal, announced on 22 August that its members would suspend cashless hospitalisation for Bajaj Allianz and Care Health Insurance policyholders from 1 September.
The plan was later rolled back, but AHPI said the move was prompted by Bajaj Allianz’s refusal to revise reimbursement rates in line with rising medical costs, with some hospitals alleging they were even being pushed to accept tariffs lower than those in already-expired contracts.
What is common empanelment?
The General Insurance Council draft spells out how the Common Empanelment system would actually work. Right now, every hospital has to sign separate contracts with each insurance company. Under the new model, hospitals would only need to sign one tripartite agreement—with the council and all insurers together.
Once they do, they will become part of a common network that every policyholder can access, no matter which insurer they are covered by.
The agreement clearly lays down the rules of engagement between hospitals and insurers: The cost of packages, process of cashless transactions from admission to discharge, time taken by insurers to pay hospitals, and even clauses on confidentiality and indemnity.
The draft also mentions that the insurer must pay the provider (hospital) within 30 days of receiving all documents relevant to the claim. Payment is to be made via electronic fund transfer, with tax deducted at source as per law.
The Council, on its part, would act as mediator in disputes—starting with cases where insurers delay or deny payments after giving cashless approval.
The draft outlines the benefits for each side. For patients, it means wider access to hospitals, faster approvals and discharges, smoother transition even if they switch insurers or buy top-up policies, and less confusion over how much they actually need to pay.
For hospitals, it reduces paperwork by replacing multiple contracts with a single one, introduces scheduled revisions of package rates to avoid uncertainty, and builds in safeguards against arbitrary removal from the network.
And for insurers, it promises harmonised processes across companies, organised management of hospital networks, and stricter compliance with package rates.
General Insurance Council to be part of agreement
According to the draft of the common empanelment model, accessed by ThePrint, the council itself will become a signatory to hospital-insurer contracts, a departure from the current practice where insurance companies and hospitals deal with each other independently.
The council’s role will focus on enrolment, negotiating tariffs for hospitalisation and treatment, and even the removal of hospitals from networks.
At present, hospitals sign separate agreements with each insurer and bargain individually over prices, a system that the new model aims to replace with a single-window process.
Industry sources said the process is still underway. “It takes time. GIC has to organise everything because the portal is still under completion,” the source explained, adding that GIC has already created committees to handle applications and has begun discussions with hospitals.
According to the source, the negotiations are designed to account for variations in hospital type, category, facilities, and location. “We have to sit with the hospital and fix the price for each treatment,” the source said.
Some specialisations, however, have been easier to standardise. Eye clinics, for example, were cited as a case where most procedures are ‘day-care based’, largely cataract surgeries or minor injections, and therefore simpler to package. “But the challenge lies in the mark-ups, especially on lenses. How does a patient ever know the actual cost?” the source remarked, pointing to the lack of transparency in pricing.
“Hospitals are sensitive about sharing too much data, but the idea is that everything should be transparent, from the moment a patient walks in to the final bill,” the source added.
While big corporate hospitals dominate the sector, the council is actively focusing on mid-sized facilities. “Everyone wants to go to corporate hospitals, and that’s why costs are spiraling. But if the council can strengthen 100- to 120-bed hospitals in smaller cities, it will not only give them a financial boost but also improve facilities for patients,” said the source.
So far, the GIC has received around 2,000 applications for empanelment, mostly from middle-level hospitals across the country. Sources say once the system is fully implemented, patients will finally be able to walk into a hospital knowing exactly what they will be charged.
“Ultimately, this is for the customer’s benefit. Right now, nobody has any clue what the bill will look like when they enter a hospital. Why should it happen that way?” the source asked.
Not mandatory for hospitals
The document makes it clear that joining the Common Panel will not be mandatory. Hospitals can opt out, but doing so may leave them outside any insurer’s cashless network, since individual company panels will no longer exist.
In such cases, patients can still seek treatment at these hospitals, but they would have to pay the bill upfront and later claim reimbursement from their insurer.
“The council is not forcing hospitals to join; it’s entirely up to them,” the industry source explained. “Most hospitals are already part of individual company panels, and that will continue. But once they onboard the Common Empanelment, their separate agreements with individual insurers will no longer be valid.”
Hospital networks argue this could push patients away from non-empanelled facilities, as the absence of cashless treatment would mean higher out-of-pocket costs. Over time, they warn, patients are likely to prefer hospitals on the Common Panel to avoid the financial and procedural burden of reimbursement claims.
Rates under the common panel will generally be revised every 30 months, the draft notes. In cases where hospitals are removed from the panel, the decision will not be unilateral. Hospitals will be given an opportunity to defend themselves, with a review mechanism in place for appeals.
‘Insurers might dictate hospital tariffs’
The proposal has already set off alarm bells among hospital associations. Several networks have called it “dangerous”, warning that it could amount to cartelisation by insurers, strip hospitals of their pricing autonomy, restrict their ability to negotiate on fair terms, and ultimately affect the quality of care for patients.
“Basically, all hospitals will be forced to accept rates like Ayushman Bharat, and that is damaging,” said Dr Girdhar J. Gyani, Director-General of the Association of Healthcare Providers of India (AHPI).
The Delhi Medical Association Nursing Home Forum (DMA NHF) has also formally complained to the Insurance Regulatory and Development Authority of India (IRDAI), the apex insurance regulator, alleging anti-competitive practices by insurers acting collectively through the GIC.
In its statement, DMA NHF said the “common empanelment” framework has no legal basis and amounts to illegal combined bargaining.
“This strips hospitals of their right to negotiate independently, suppresses tariffs, and threatens quality healthcare,” said Dr V.K. Monga, Chairman of DMA NHF.
The forum added that hospitals are being compelled to provide cashless services under expired contracts at unviable tariffs, risking care quality. India already has some of the lowest hospital tariffs globally, it said, and further suppression would hurt investment and modernisation.
The forum also flagged inefficiency in insurer spending, noting that major standalone health insurers reported incurred claims ratios as low as 54–67% in FY 2024–25, with large shares of premiums spent on commissions and administrative costs rather than patient care.
According to Gyani, the delisting of hospitals by insurers, such as in the case of Max Healthcare, is not uncommon. “Insurers regularly remove hospitals from their panels. For instance, Aditya Birla delisted Medanta Hospital in Lucknow and Manipal hospital in Dwarka in Delhi. This keeps happening,” he said.
One of the key reasons, he explained, is outdated tariffs. “Some hospitals are still working on 2017 or 2019 tariffs and have not revised them. So there are disputes over a few high-value procedures, where certain hospitals specialise. Fraud cases do arise occasionally, but in most cases, it is about tariffs,” Gyani said.
He added that a meeting with the General Insurance Council (GIC) was scheduled on 2 September, where revoking suspensions from both sides was on the agenda, along with discussions on the proposed common empanelment model. But the meeting has still not been held.
The Association of Healthcare Providers of India (AHPI) is currently in talks with at least six insurers, including Niva Bupa, Aditya Birla, ICICI Lombard, and Care Health, over recent delistings. AHPI also plans to raise broader concerns around the common empanelment framework with the GIC and the new chairman of the IRDAI in the coming weeks.
“Right now, our focus is on rebuilding trust,” Gyani said. “We are asking insurers to come to the table if they have delisted hospitals. Usually, they push for certain rates that hospitals may not agree to. Then they say—‘your peer hospital has accepted, why won’t you?’—and that’s when delistings happen. That is the usual pattern.”
A user on LinkedIn also raised concerns over the suspension of cashless services at Max Hospital.
“As a customer, why should I suffer because of their disagreement? I live in South Delhi, and Max is the nearest hospital to me. I have purchased a cashless health policy, so it is unfair that I am facing inconvenience due to this issue,” he wrote, pointing to the suspension of cashless services by Niva Bupa at Max Hospitals and urging the Insurance Regulatory and Development Authority (IRDAI) to step in.
The user requested that the matter be resolved at the earliest, stressing that policyholders should not be penalised for conflicts between hospitals and insurers.
(Edited by Viny Mishra)
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