Arogyasri arrears reach ₹1500 crore; AP hospitals stop cashless treatment

Starting Wednesday, private super speciality hospitals in Andhra Pradesh will not provide cashless treatment to patients below the poverty line under the state government’s Arogyasri health scheme in protest against non-clearance of their dues to the extent of ₹1500 crore pending since August last year, people familiar with the matter said.

In a letter written to the Arogyasri Trust on Monday, Andhra Pradesh Speciality Hospitals Association (ASHA) said apart from patients being covered under Arogyasri, the private hospitals would also stop providing subsidised treatment to the state government employees under Employees Health Scheme (EHS).

The association said, despite several reminders, the government hasn’t reimbursed the funds to private hospitals for providing cheaper treatments to state government employees and poor people. “The government has not been clearing pending bills since August last year and the dues have piled up to around ₹1500 crore,” the association said in the letter.

Stating that the specialty hospitals were compelled to take the decision to stop treatment only under unavoidable circumstances, the association requested the government to clear their dues to avoid any inconvenience to the poor people.

A senior office bearer of the association, who pleaded anonymity, said the Arogyasri scheme is a flagship program of the state government; yet, it hasn’t released the funds to the hospitals for the last eight months, though as per the Memorandum of Understanding with the hospitals, the bills are supposed to be cleared within 45 days.

“The scope of the treatment under Arogyasri was enhanced in the last five years and the number of procedures covered has risen from 900 to 3,200. This has caused a huge burden on the private hospitals,” the office bearer said. “Whenever we represented the matter to the government, it used to release small amounts to the hospitals. Even this has come to a halt over the last eight months.”

While Arogyasri Trust chief executive officer Lakshmi Shah could not be reached for his reaction, Andhra Pradesh Arogyasri Network Hospitals Association president Busireddy Narendra Reddy said the smaller private hospitals would continue to extend the medical facility to the poor patients, though speciality hospitals have decided to stop treatment from Wednesday.

“There are 2,700 private hospitals in the state and 20% of them are speciality hospitals providing specialised treatment to the patients. For now, only specialty hospitals have decided to discontinue the treatment under Arogyasri scheme,” Reddy said.

However, he admitted that private hospital managements are finding it difficult to run their institutions due to non-payment of dues by the government on time. “The number of patients getting treatment under the Arogyasri scheme has increased from 12 lakh in 2022-23 to 13.90 lakh in 2023-24. But the budget under the scheme remained the same at ₹3,350 crore. This has resulted in a backlog of payment,” he explained.

Reddy expressed confidence that the government would release the dues to the private hospitals in the next few days to avoid inconvenience to the poor patients. Hindustan Times