In a major development affecting thousands of health insurance policyholders in Ahmedabad, hospitals across the city have stopped accepting cashless claims from three major insurance companies — Tata AIG, Star Health, and Care Health Insurance.
Why Have Hospitals Taken This Step?
The Ahmedabad Hospital and Nursing Home Association (AHNA) announced that hospitals are halting cashless treatment for patients with policies from these three insurers. According to Dr. Bharat Gadhavi, president of AHNA, this move comes after repeated issues with the insurers.
He said the insurers have:
- Delisted hospitals without any warning
- Refused to update treatment rates to match current medical costs
- Created difficulties in claim settlements, especially during patient discharge
Dr. Gadhavi also warned that if the problem is not resolved quickly, cashless services with these insurers may be stopped across all of Gujarat, not just in Ahmedabad.
What Does This Mean for Policyholders?
If you have a health insurance policy from Tata AIG, Star Health, or Care Health and visit a hospital in Ahmedabad that’s part of this dispute, you will not get cashless treatment.
However, you can still get treatment and later apply for reimbursement. This means:
- You pay the hospital bill yourself first
- Then, submit the documents to your insurance company to claim the money back
Only the cashless facility is suspended — reimbursement is still available.
Why Are Hospitals Angry?
Dr. Gadhavi explained that this is not a new issue. Over the past year, they have received the highest number of complaints from patients about these three insurance companies.
Some of the main complaints include:
- Hospitals being forced to follow outdated treatment rates from 5-6 years ago
- Deductions in claim amounts during discharge, even after pre-approval
- Sudden removal of hospitals from insurer networks without explanation
These actions, according to AHNA, are making it difficult for hospitals to function properly.
What Do Insurance Companies Have to Say?
The insurance companies have strongly denied the allegations.
Tata AIG claimed that some hospitals were involved in fraudulent practices, which is why they were removed from the network. The company said that this step was taken to protect policyholders from inflated costs, which can lead to higher insurance premiums.
Star Health, on the other hand, stated that it will consider legal action against AHNA for damaging its image. A spokesperson for Star Health said that the association never tried to talk directly with them before making public accusations.
They also clarified that some hospitals were investigated as part of regular checks, and only after proper review were they removed from the network.
Care Health did not issue a detailed comment on the matter.
What Do the Complaint Numbers Say?
As per the IRDAI (Insurance Regulatory and Development Authority of India) Handbook for 2023-24:
- Star Health received 16,603 complaints, the highest among all health insurers
- Care Health had 6,492 complaints
- Tata AIG got 3,792 complaints
Star Health also had 795 pending complaints from the previous year, showing an ongoing issue with customer grievance redressal.
What About Hospital Coverage in Ahmedabad?
Considering Ahmedabad’s large population — over 72 lakh people (as per the 2011 census) — the number of hospitals available for cashless treatment is quite low:
- Tata AIG: 310 network hospitals, 25 excluded → 1 hospital for every 23,271 people
- Care Health: 174 network hospitals, 104 excluded → 1 hospital for every 41,461 people
- Star Health: 238 network hospitals, 43 excluded → 1 hospital for every 30,311 people
This clearly shows that policyholders already have limited options for cashless treatment, and the current situation only makes it worse.
How Are Claims Being Settled in Gujarat?
According to IRDAI data for Gujarat:
- 67% of health insurance claims are settled through reimbursement
- Only 29.43% of claims are settled through cashless mode
This is much lower than the national average, where nearly 60.60% of claims are settled through cashless services. So, Gujarat already sees more reimbursement-based claims, and the current issue may push that number even higher.
Final Thoughts: Who Is Suffering the Most?
While both hospitals and insurers are blaming each other, the real burden falls on policyholders. Patients who expected a smooth cashless experience during medical emergencies are now left to manage large bills upfront and wait for reimbursement.
It is still unclear whether the IRDAI will step in to resolve the matter, but unless a solution is reached soon, more policyholders across Gujarat could face similar troubles.
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