Hospitals may withdraw Star Health cashless services amid ongoing disputes, warns AHPI 

Hospitals across India may soon stop offering cashless services to Star Health Insurance policyholders as the Association of Healthcare Providers–India (AHPI) on Friday flagged persistent issues with the insurer’s practices.

The warning follows repeated complaints from member hospitals about delayed or rejected claims, outdated tariffs, and sudden withdrawal of cashless arrangements, which hospitals say could affect both patient care and their financial stability.

In a formal communication to Star Health Insurance, AHPI highlighted multiple concerns, including the refusal to revise tariffs in line with rising healthcare costs, pressure on hospitals to further reduce outdated tariffs, arbitrary withdrawal of cashless services, and deductions or rejections of claims even after prior approval. According to AHPI, these practices could compromise patient safety and the operational viability of hospitals.

“The systemic failure of Star Health Insurance to address legitimate grievances, combined with their unfair practices, leaves us with no choice but to take appropriate action. Our primary responsibility is to safeguard the interests of both patients and healthcare providers. No insurer should be allowed to jeopardise patient care or undermine the financial viability of hospitals for commercial gain,” said Dr. Girdhar Gyani, Director General of AHPI.

Unless Star Health takes definitive steps to address these concerns, AHPI warned that member hospitals may suspend cashless services for the insurer’s policyholders from September 22, 2025. Patients would still receive treatment but may be required to make upfront payments and seek reimbursement post-discharge. AHPI urged its members to support affected patients by facilitating care through alternate payment and reimbursement channels, while reiterating its willingness to engage with insurers to reach a resolution.

Star Health and Allied Insurance Company said: "We have not received any case of cashless suspension from our network partners with whom we have bilateral agreements. AHPI has chosen to issue threats of suspending cashless services in a manner that is arbitrary, lacking clarity or actionable details. AHPI’s abrupt press statement has only prejudiced the interests of policyholders across the country and created unnecessary confusion at a time when the government is promoting healthcare as a basic necessity by exempting GST on health insurance. We reassure our customers that their access to healthcare through Star Health Insurance will not be impacted. Even if this were to happen, we will ensure that customers get their claim payments before paying the hospital."

The insurer’s practices have also been highlighted in regulatory data. The Insurance Ombudsman Annual Report 2023-24 shows Star Health topped the list of health insurers with over 13,300 complaints in FY24, more than 10,000 of which were related to partial or full claim rejections. This figure exceeded the combined complaints against the next four largest health insurers, underscoring the systemic challenges hospitals face in dealing with the company.

Such disputes between insurers and hospitals are not uncommon, particularly in India’s private healthcare sector where tariffs have remained largely stagnant despite rising operational costs. Hospitals have often expressed concerns that prolonged delays in revising reimbursement rates, coupled with arbitrary claim adjustments, can strain finances and indirectly affect patient care.

AHPI which represents over 15,000 hospitals and healthcare institutions across India has consistently advocated for a more structured framework for tariff revisions and faster claim settlements to ensure sustainability and quality in healthcare delivery.