Over 15,000 hospitals, including well-known chains like Max Healthcare and Medanta, will stop providing cashless treatment facilities on September 1, 2025, causing a significant setback for thousands of Bajaj Allianz health insurance members in North India.
The crisis follows an extensive disagreement between the insurance company and hospitals. Despite the fact that medical expenses in India have been increasing by 7–8% annually, Bajaj Allianz has not revised its reimbursement rates in years, according to the Association of Healthcare Providers of India (AHPI), which represents a large number of private hospitals.
The Reason Behind Hospitals’ Action
Hospitals claim that cashless treatments are unsustainable due to medical inflation of 7–8% per year, outdated tariffs, delayed claim settlements, and unilateral deductions. They claim that continuing services under antiquated low-cost contracts risks patient safety and financial viability. Bajaj Allianz allegedly pressed for more tariff reductions despite AHPI’s longstanding demand for a tariff review every two years.
Medical Inflation Puts Pressure On Cashless Schemes
Dr. Girdhar Gyani, the Director General of AHPI, claims that the strain on finances has become unbearable. He clarified that even while medical inflation renders such methods unsustainable, hospitals are being expected to continue operating at previous tariff levels and, in certain situations, even lower them.
Patients who receive cashless treatment typically do not have to pay for their care at the time of admission; instead, hospital costs are paid directly between the hospital and the insurance company.
This facility typically covers emergency care for trauma or accidents, simple procedures that don’t require an overnight stay, hospitalization costs, operations, and treatment for major conditions like cancer or kidney failure.
The Effect On Policyholders
Because of this ban, policyholders may experience severe disruptions. Patients may find it difficult to cover upfront expenses in the absence of cashless services, particularly in cases of emergencies involving expensive procedures, intensive care unit treatment, or extended hospital stays. One of the main advantages of health insurance is being undermined by this move, which not only causes financial strain but also runs the risk of treatment delays.
What Next?
AHPI has verified the September 1 suspension as of now. Although there is still room for negotiation, many patients will have to get ready for a reimbursement-only system unless a solution is found. Because delays in insurance services have a direct impact on patients’ well-being and ability to receive appropriate medical care, such conflicts require immediate action.
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