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Private hospitals concerned over removal of payment clause in revised CGHS empanelment pact

Large private hospitals have expressed serious reservations over the removal of payment terms in a proposed agreement for empanelment with the Central Government Health Scheme (CGHS), saying this and other clauses will have a major impact on their ability to deliver seamless services.

“The newly proposed agreement has sought extension of empanelment and added new clauses which are of deep concern to hospitals,” Girdhar Gyani, coordinator of the CGHS working group for private healthcare providers, told Moneycontrol. “The government has very detailed clauses on the hospital’s terms of operation, termination, penalty and performance clauses. However, there are no payment terms in the agreement.”

The CGHS allows over 40 million serving and retired Central government employees to avail of medical treatment paying nominal monthly charges at government clinics and empanelled private hospitals and diagnostic centres.

The absence of a payment clause in the proposed pact is the latest flashpoint for empanelled private hospitals, which had stopped cashless facilities for CGHS patients after complaining of delayed processing of their reimbursement claims and long-pending dues.

According to the previous CGHS agreement with hospitals, provisional payment of 70 percent of the claimed amount would be made within five working days on the submission of bills and the balance amount after due scrutiny within 30 days.

However, there is no mention of the terms of payment in the revised memorandum of agreement dated September 13 for private hospitals seeking to continue their empanelment with the CGHS for the next two years.

“There is also no clause that allows hospitals to contest arbitrary deductions or denials,” said Gyani. “All healthcare groups indicated that CGHS takes nine months to one year to clear their bills. This places working capital stress on hospitals as they need to pay salaries monthly and their vendors in 45 days.”

Nikhilesh Chandra, director of the CGHS, did not respond to queries from Moneycontrol on the removal of the payment clause from the agreement.

According to the memorandum, healthcare organisations already on the CGHS panel must submit their letter of acceptance for the revised agreement within 15 days for continuation on the CGHS panel for another two years – until September 30, 2024 – failing which it will be presumed they are not interested and will be removed from the panel.

Representatives from hospitals including Medanta, Max Healthcare, Fortis Healthcare, Narayana Health and Yashoda Hospitals said the changes will have a major impact on their ability to deliver seamless services to CGHS beneficiaries.

Outstanding payments have always been a bone of contention between private hospitals and the Union government. The Comptroller and Auditor General of India noted that 632,000 claims amounting to Rs 527.62 crore were outstanding as of March 31, 2021.

Gyani said the CGHS coordination committee representing healthcare associations including the Indian Medical Association, Ficci, Assocham, Healthcare Federation of India (NATHEALTH) and Association of Healthcare Providers had a discussion on the new provisions on September 21.

The committee wrote to Union health minister Mansukh Mandaviya and health secretary Rajesh Bhushan highlighting their concerns.

“Representatives from key hospital groups expressed serious reservations about some of the new provisions… These changes will have a major impact on the ability of hospitals to deliver seamless service to CGHS beneficiaries without impacting the quality of healthcare,” they said in the letter.

Stagnant rates
The hospitals also objected to the continuation of previous CGHS rates, saying they have not been revised since 2014.

“In the past eight years since these packages were introduced, hospitals continued to pay annual increments to doctors and nurses, deal with rampant increases in the cost of medicines and consumables, and pay more for all operating overheads. It is impossible for hospitals to maintain acceptable standards of clinical quality at these rates,” Gyani said in the letter to the health secretary.

“In addition, the additional discounts and payment gateway tariffs being imposed will make the programme further unviable,” said Shravan Subramanyam, president of NATHEALTH. “It is important to engage in a dialogue to address the challenges in the scheme and make the supply pool grow where quality and appropriate care is provided to CGHS beneficiaries seamlessly in a viable contractual framework.” Moneycontrol

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