Private hospitals reduce services to AB-PMJAY beneficiaries over payment delays

Private sector hospitals in many states have reduced their services to the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) beneficiaries due to payment delays amid insufficient fund allocations from state governments towards the health insurance scheme.

The scheme, launched in 2018, is jointly funded by the Centre and states in the ratio of 60:40, with the union government allocating ₹7,500 crore to PMJAY this year.

Officials from NITI Aayog, health ministry, and private hospitals who held a review meeting of the scheme on 1 May raised concern over the inadequate release of funds by states for the insurance scheme, persons aware of the matter said.

“The problem of untimely payments to the hospitals arose when some states like Telangana, and Andhra Pradesh merged their state health scheme into the PMJAY,” said Girdhar Gyani, director general, Association of Healthcare Providers of India (AHPI). which represents majority of healthcare providers in India.

The inordinate delay in receiving reimbursement has hampered the cash flow of these private hospitals and created serious operational issues, Gyani said.

The reduced participation of private hospitals in the Ayushman Bharat scheme could severely impact patients, especially as a brutal heatwave sweeps across many states, triggering a surge in heat-related illnesses.

“The government is positively reviewing the critical feedback of the scheme from the private sector,” one of the persons cited above said. “The National Health Authority has played its role. Now, the state government must finance the scheme to make PM-JAY sustainable for the private sector,” one of the persons said.

“Right now, private hospitals are feeling exhausted because of PM-JAY. Initially, the private sector thought that they would be able to fill their vacant beds at subsidized rates, but now it is consuming their profits,” said the person, adding the government is trying to address the concerns raised.

Queries sent to the health ministry and NHA spokesperson remained unanswered till press time.

“Pending bills of the hospitals are being reviewed by the finance department,” said Lakshmi Shah, CEO, State Health Authority, Andhra Pradesh.

Cash concerns
PMJAY currently has a network of 30,178 empaneled hospitals—both private and public—with a 12,881 share of private healthcare providers. They offer over 2,000 treatment procedures across 27 specialties.

Hospitals can sustain low health package rates, but if the cash flow is affected, they will not accept the scheme and will start avoiding the beneficiaries citing unavailability of beds, Gyani said, adding that a representation had been submitted to the government to resolve this matter as soon as possible.

“The central government has been consistently telling the states that if they want to bring additional population under PMJAY, then the additional amount must be given by the state government only and the central government will not contribute to it,” said Gyani.

Ayushman Bharat aims to cover over 100 million poor and vulnerable families, or around 500 million individuals, providing coverage of up to ₹5 lakh per family per year for secondary and tertiary care hospitalization.

Around 68 million authorized hospital admissions have taken place and 400 million people have received their Ayushman cards so far. The beneficiaries under the PMJAY are selected based on Socio Economic and Caste Census (SECC) database 2011 LiveMint