Insurers hit back: GIC says AHPI cashless suspension harms patients, lacks clarity

The General Insurance Council (GIC) on August 26 criticised the Association of Healthcare Providers (India)’s (AHPI) decision to suspend cashless hospitalisation services for Bajaj Allianz and Care Health Insurance policyholders in North India from September 1, calling the move “arbitrary” and “lacking clarity.”

“This sudden unilateral action has created unnecessary confusion and concern among citizens, undermining trust in the health insurance ecosystem. Instead of constructive dialogue, a press statement was issued, prejudicing the interests of policyholders nationwide,” GIC said.

AHPI, a representative body of hospitals, announced on August 22 that its members would suspend cashless services for Bajaj Allianz and Care Health Insurance, citing disputes over reimbursement rates, delayed payments, unilateral deductions, and cumbersome pre-authorization processes. Hospitals alleged insurers refused to revise tariffs in line with rising medical costs and pressured providers to cut charges under expired contracts.

The GIC stressed that disrupting cashless access ultimately harms citizens. It highlighted industry initiatives such as Cashless Everywhere and the National Health Claims Exchange (NHCX), which aim to provide seamless treatment without financial stress. Insurers, it said, invested heavily in such reforms and settled over ₹87,000 crore in claims during FY24.

“Disruption in cashless services forces families into higher out-of-pocket expenses and can jeopardise lives in emergencies when immediate financial arrangements are impossible,” GIC said. “Such action undermines the sanctity of human life.”

The Council emphasised that health insurance is a safety net for millions of Indians and urged AHPI to reconsider. “When an insurer is unfairly targeted, it affects crores of citizens who rely on health insurance. Patients and families must never face such uncertainty,” it added.

GIC called on AHPI to withdraw its directive and re-engage with insurers, stressing that protecting lives requires cooperation across the healthcare ecosystem.

AHPI Director General Dr. Girdhar Gyani said the decision was unavoidable, citing medical inflation of 7–8% annually, driven by rising input costs, higher medicine prices, and consumables. AHPI added that it had issued a similar warning to Care Health Insurance on August 22, 2025, and if no action is taken, member hospitals may be compelled to suspend cashless services for Care Health Insurance policyholders as well.

Bajaj Allianz General Insurance said it is committed to resolving the standoff with the Association of Healthcare Providers (India). “We have scheduled a meeting with AHPI representatives this Thursday to address their concerns and ensure our customers continue to access healthcare without disruption,” said Bhaskar Nerurkar, Head – Health Administration Team.

He added that Bajaj Allianz remains focused on offering a seamless claims experience, maintaining strong hospital partnerships, and working through open dialogue to find solutions that prioritise customer well-being.