Biggest CGHS overhaul in 15 years: What changes for govt employees and pensioners now

In a major boost for over 11 million central government employees and pensioners, the Centre has announced the biggest overhaul of the Central Government Health Scheme (CGHS) in 15 years—revising package rates for nearly 2,000 medical procedures, effective October 13, 2025.

The move follows longstanding complaints from beneficiaries who were routinely denied cashless treatment at CGHS-empanelled hospitals. “Hospitals refused service or demanded upfront payment because old package rates were outdated and reimbursements were delayed,” the National Federation of Central Government Employees Unions (GENC) stated in a recent memorandum.

The government’s new pricing structure addresses this. Rates will now vary by city tier and hospital accreditation:

• Tier-II cities: 19% lower than base rate
• Tier-III cities: 20% lower than base rate
• NABH-accredited hospitals: Base rate
• Non-NABH hospitals: 15% below base
• Super-specialty hospitals with 200+ beds: 15% above base

This tiered model ensures that high-quality hospitals are incentivized, while regional cost variations are accounted for.

What changes for beneficiaries?
Hospitals now have financial reasons to offer cashless services, easing the burden on patients. This reduces the need for large out-of-pocket payments and long reimbursement delays. “Cardholders will now be able to walk into empanelled hospitals with confidence,” a CGHS official said.

Until now, only piecemeal updates had been made—such as limited revisions in ICU and room rent rates in 2023, and surgical implants in 2024.