Private Hospitals Threaten shutdown of Cashless Services- Is CGHS on brink of failure?
Advertisement
Delhi: With more than hundred of crores of dues of private hospitals empanelled with the Central Government Health Scheme (CGHS), hospitals have now given an ultimatum to the government, threatening to stop the offer cashless services unless the government clears their dues.
The announcement to this effect was recently made in a press conference, which was held on the same day, Union Health Minister, Dr Harsh Vardhan announced Central Government Health Scheme (CGHS) services will now be extended to 100 cities.
The CGHS serves 12.09 lakh primary card holders and 35.72 lakh beneficiaries, out of which around 17 lakh beneficiaries belong to Delhi-NCR. About 58 per cent of CGHS beneficiaries avail facilities at least once in a year, with existing employees of CGHS taking benefits in cashless form while retired taking benefits through reimbursement way. For hospitals, CGHS scheme also forms the basis of empanellements with government organisations including ECHS.
However, offering cashless facilities has turned out a sour game for the healthcare service providers as huge dues are now pending under the CGHS scheme. With the amounts of pending payments by the government now rising to thousands of crores of rupees, hospitals have pointed out to their inabilities to continue providing cashless facilities if their dues are not going to be cleared
Private hospitals uniting under the various forums including those of Association of Healthcare Providers of India (AHPI), National Medical Forum (NMF), as well as the Indian Medical Association (IMA) shared their woes that not only do CGHS scheme rates are extremely low impacting their profitability, the fact that payments are not being made for the service offered are completely ruining their functioning
"The Indian Healthcare industry is passing through crisis. Thousands of crores are due to be paid by CGHS/ ECHS to private hospitals. The outstanding are pending for past several months. Repeated attempts by hospitals and associations, do not yield any response. No interest is paid on such outstanding. Non-payment of legitimate dues by the government is taking a toll on the day to day functioning of the hospitals. Hospitals are unable to pay salaries to the employees. Many hospitals have begun to cut down the operations by closing of certain wards/beds. Hospitals are constrained to lay off the employees. If the situation is allowed to persist, it is feared that lakhs of hospital employees may lose jobs," said Dr Alex Thomas, President Association of Healthcare Providers of India
With the hospitals having been pushed to the brink of unsustainability, they pointed out that they will be constrained to suspend cashless services for the beneficiaries of CGHS/ ECHS.
" The moment hospitals offer services to a patient under any of these schemes, they incur all the expenses whether it is doctors, medicines and other hospital expenditures. However, with delayed reimbursement and instant expenditure, hospitals are being slowly being drawn to the brink of sickness, for each service offered under the scheme. Why will hospitals offer cashless services when we know that payments are not going to come?," said Dr Prem Aggarwal, President, National Medical Forum.
" Stopping Cashless services does not mean stopping CGHS scheme. It would just mean, that a patient coming with a CGHS card would have to pay the hospital instantly for the services availed, and they can then claim re-reimbursement from the government under the scheme," Dr Aggarwal further explained
While outstanding issue has pushed hospitals to the brink of unsustainability, the reimbursement rates for various medical procedures under CGHS have not been revised since 2014, whereas the hospital expenses continue to grow to match inflation related expenses. Rates & agreements between CGHS and hospitals were supposed to be revised every two years, but CGHS have been unilaterally postponing it without giving any reason. Studies carried out by various institutes show that rates of many procedures under CGHS do not cover even the operating cost incurred by hospitals.
" It is therefore time that government take urgent stock of ground realties and engages with private sector to assess the genuine concerns and save the industry from collapse/ slow down. Healthcare besides having social obligation has potential to be largest employer and it is therefore of utmost importance that government and private sector get in to dialogue and find lasting solution paving way to achieve universal health coverage through AYUSHMAN BHARAT," the IMA stated in its release
The announcement to this effect was recently made in a press conference, which was held on the same day, Union Health Minister, Dr Harsh Vardhan announced Central Government Health Scheme (CGHS) services will now be extended to 100 cities.
The CGHS serves 12.09 lakh primary card holders and 35.72 lakh beneficiaries, out of which around 17 lakh beneficiaries belong to Delhi-NCR. About 58 per cent of CGHS beneficiaries avail facilities at least once in a year, with existing employees of CGHS taking benefits in cashless form while retired taking benefits through reimbursement way. For hospitals, CGHS scheme also forms the basis of empanellements with government organisations including ECHS.
However, offering cashless facilities has turned out a sour game for the healthcare service providers as huge dues are now pending under the CGHS scheme. With the amounts of pending payments by the government now rising to thousands of crores of rupees, hospitals have pointed out to their inabilities to continue providing cashless facilities if their dues are not going to be cleared
Private hospitals uniting under the various forums including those of Association of Healthcare Providers of India (AHPI), National Medical Forum (NMF), as well as the Indian Medical Association (IMA) shared their woes that not only do CGHS scheme rates are extremely low impacting their profitability, the fact that payments are not being made for the service offered are completely ruining their functioning
"The Indian Healthcare industry is passing through crisis. Thousands of crores are due to be paid by CGHS/ ECHS to private hospitals. The outstanding are pending for past several months. Repeated attempts by hospitals and associations, do not yield any response. No interest is paid on such outstanding. Non-payment of legitimate dues by the government is taking a toll on the day to day functioning of the hospitals. Hospitals are unable to pay salaries to the employees. Many hospitals have begun to cut down the operations by closing of certain wards/beds. Hospitals are constrained to lay off the employees. If the situation is allowed to persist, it is feared that lakhs of hospital employees may lose jobs," said Dr Alex Thomas, President Association of Healthcare Providers of India
With the hospitals having been pushed to the brink of unsustainability, they pointed out that they will be constrained to suspend cashless services for the beneficiaries of CGHS/ ECHS.
" The moment hospitals offer services to a patient under any of these schemes, they incur all the expenses whether it is doctors, medicines and other hospital expenditures. However, with delayed reimbursement and instant expenditure, hospitals are being slowly being drawn to the brink of sickness, for each service offered under the scheme. Why will hospitals offer cashless services when we know that payments are not going to come?," said Dr Prem Aggarwal, President, National Medical Forum.
" Stopping Cashless services does not mean stopping CGHS scheme. It would just mean, that a patient coming with a CGHS card would have to pay the hospital instantly for the services availed, and they can then claim re-reimbursement from the government under the scheme," Dr Aggarwal further explained
Hospitals raise concern on CGHS Rates
While outstanding issue has pushed hospitals to the brink of unsustainability, the reimbursement rates for various medical procedures under CGHS have not been revised since 2014, whereas the hospital expenses continue to grow to match inflation related expenses. Rates & agreements between CGHS and hospitals were supposed to be revised every two years, but CGHS have been unilaterally postponing it without giving any reason. Studies carried out by various institutes show that rates of many procedures under CGHS do not cover even the operating cost incurred by hospitals.
" It is therefore time that government take urgent stock of ground realties and engages with private sector to assess the genuine concerns and save the industry from collapse/ slow down. Healthcare besides having social obligation has potential to be largest employer and it is therefore of utmost importance that government and private sector get in to dialogue and find lasting solution paving way to achieve universal health coverage through AYUSHMAN BHARAT," the IMA stated in its release
Our comments section is governed by our Comments Policy . By posting comments at Medical Dialogues you automatically agree with our Comments Policy , Terms And Conditions and Privacy Policy .
Disclaimer: This website is primarily for healthcare professionals. The content here does not replace medical advice and should not be used as medical, diagnostic, endorsement, treatment, or prescription advice. Medical science evolves rapidly, and we strive to keep our information current. If you find any discrepancies, please contact us at corrections@medicaldialogues.in. Read our Correction Policy here. Nothing here should be used as a substitute for medical advice, diagnosis, or treatment. We do not endorse any healthcare advice that contradicts a physician's guidance. Use of this site is subject to our Terms of Use, Privacy Policy, and Advertisement Policy. For more details, read our Full Disclaimer here.
NOTE: Join us in combating medical misinformation. If you encounter a questionable health, medical, or medical education claim, email us at factcheck@medicaldialogues.in for evaluation.