The move will affect 50 lakh serving employees and over 30 lakh pensioners, as well as their family members. At a conservative estimate, the total number of persons affected could well be over two crore.
The move was necessary, said the Association of Healthcare Providers India (or AHPI, the nodal body of private empanelled hospitals) for a number of reasons, the main ones being CGHS owes these hospitals around Rs 200 crore in unpaid services as well as "unreasonably low" CGHS tariffs that haven't been revised for the last four years. A doctor's consultation fee, for example, remains Rs 58.
Also, AHPI says CGHS makes "illegal" deductions of 10% on all payments leading to losses for member hospitals. AHPI claims the amount runs up to Rs 180 crore.
In Karnataka, 20 hospitals, all in Bangalore, are empanelled with AHPI. HCG, Apollo hospitals, MS Ramaiah Memorial Hospital and Bangalore Baptist Hospital, among others, will not provide the cashless health scheme from March 7.
"When we were empanelled with the government, it was agreed upon that we will get 10% rebate on treatment charges if the government pays within seven days. But now, this deduction has been made applicable even when the amount is unpaid for years. That's illegal. This has led to huge losses for member hospitals amounting to over Rs 180 crore over the past three years," says Dr Alexander Thomas, CEO, Bangalore Baptist hospital, who represents AHPI in Bangalore.
Some hospitals have put up a public notice to this effect, reading, "CGHS tariffs are unreasonably low and not been revised for the last four years, threatening the very existence of the medical service providers."
Dr Naresh Shetty of AHPI said, "The empanelled hospitals have been providing services under most difficult circumstances. They had to deal with steep hikes in electricity and water tariff, consumables, wages, taxes. We've been requesting a revision since June 2013 but there's been no response."
The dues are just one issue. The bigger issue is that a doctor's consultation charge of Rs 58 is appalling. The fees for several procedures are abysmally low. We don't want to let down our beneficiaries but we have no choice. We ask the CGHS to consider the rates of the National Accreditation Board for Hospitals & Healthcare Providers. We've suggested that if at all CGHS were to take tender route, let CGHS decide the rates based on lowest bid received from NABH - accredited hospitals. Adopting rates like this would be logical and rational. Treating a patient can't be made similar to selling onions and potatoes.
—Giridhar K Gyani | director general, AHPI, New Delhi