Telangana hospitals face financial strain as Rs 2,700 crore dues remain pending
Hyderabad: Telangana’s healthcare sector faces a financial crunch, with around Rs 2,000 crore in dues reportedly pending under Aarogyasri for the last 15 months, and about Rs 700 crore pending under the old Employee Health Scheme (EHS) for the past 24-25 months.
The financial strain now threatens to derail the state’s revamped Employee Health Scheme (EHS) and the Aarogyasri safety net. Although the state government has begun deducting 1.5 per cent from the basic pay of employees and pensioners to fund the Employee Health Care Trust (EHCT), the scheme has yet to take off effectively, as 70 to 80 per cent of small and medium private hospitals, largely located in districts, reportedly have yet to enrol in the programme.
The Telangana Network Hospitals Association (TANHA), representing network hospitals (NWHs) that deliver approximately 80–85% of healthcare services across Hyderabad and peripheral districts, has submitted a representation to Shri Hanumanthu Garu, Chief Executive Officer of the Aarogyasri Health Care Trust (AHCT). The representation highlights key operational shortcomings in the EHS and outlines essential measures needed to implement the new EHS Policy successfully and sustainably.
The association stated, “Policy formulation lacked adequate scientific assessment of disease burdens, treatment requirements, and realistic costing mechanisms. Package pricing failed to reflect actual expenses incurred for infrastructure, manpower, consumables, and medical implants. Moreover, the absence of a structured board constitution, periodic package revision mechanisms, and formal representation of network hospitals within the Public-Private Partnership (PPP) model.”
“Aarogyasri payments to network hospitals have remained pending for nearly 14 months. This severe backlog has created unsustainable financial distress, forcing hospitals to caution that if pending dues are not released immediately, they may be compelled to reconsider continuing services from next month,” the association further added.
Key demands and suggestions for new EHS implementation include active involvement of TANHA and network hospital representatives in policy review, redrafting, and future EHS Trust/Board decision-making and establishment of a joint pricing review team—comprising AHCT officials and network hospital representatives—to set evidence-based pricing reflecting realistic treatment costs.
The association also demanded creation of a defined, time-bound grievance mechanism to address hospital operational issues and urgent release of long-pending financial arrears owed to network hospitals by AHCT. It also demanded an immediate end to coercive tactics reportedly used by district-level staff, favouring constructive dialogue and consultation instead.
The letter, signed by Dr Vaddiraju Rakesh, state president of TANHA, further stated that a representation had been submitted earlier on July 28, 2026 regarding the same, and that the doctors had expressed their inability to serve under the existing policy of the new EHS in its present form. “Despite that, we are now finding lots of Pressure tactics from the respective staff of your AHCT at all the district places. It is regrettable to see such tactics instead of addressing our concerns.
Request your good office to instruct your staff not to indulge in such tactics and pressurising our NWHs. This is regrettable and not in good taste,” the association also stated.
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