Why Hospitals Took the Step
Hospital networks, including major chains such as Max Healthcare, Medanta, and PSRI, allege that Bajaj Allianz has failed to revise reimbursement tariffs for years despite medical inflation averaging 7–8% annually. They claim the insurer has instead sought further rate cuts under contracts that have already expired. This, hospitals argue, makes it difficult to cover rising expenses in salaries, medicines, and technology.
Hospitals also accuse the insurer of arbitrary claim deductions, delayed payments, and slow admission approvals, which they say affect operational stability. According to AHPI, continuing with outdated tariffs risks compromising the quality of patient care and putting undue financial strain on healthcare facilities.
What It Means for Patients
With the suspension of cashless treatment, Bajaj Allianz policyholders will have to pay hospital bills upfront and later file for reimbursement. This defeats one of the most important features of health insurance — protection from sudden out-of-pocket expenses during medical emergencies.
Bajaj Allianz has expressed “surprise” at the AHPI announcement and stated it is in discussions with hospitals to resolve the issue. The insurer has assured customers that claim reimbursements will be processed smoothly, but the absence of cashless facilities could still create stress for families facing high medical bills.
The Larger Industry Picture
The dispute reflects a broader problem in India’s healthcare financing system. Cashless health insurance is often the most preferred mode for patients, but disagreements between insurers and hospitals over tariffs and claim practices are becoming increasingly frequent. Hospitals argue that insurers focus heavily on cost-cutting, while insurers say they must keep premiums affordable and prevent fraudulent claims.
Similar challenges are seen in government-backed schemes such as Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (PM-JAY). Many private hospitals have limited participation, citing low package rates that do not match actual treatment costs. While the scheme has improved access for millions of poor families, financial sustainability remains a pressing concern.
Balancing Affordability and Sustainability
India’s health insurance market is expanding rapidly, but disputes such as the current one highlight the delicate balance required between patient affordability, hospital viability, and insurer sustainability. Experts say a transparent and regularly updated tariff framework is needed to avoid recurring standoffs that ultimately harm patients.
For now, unless a last-minute agreement is reached, Bajaj Allianz policyholders will have to navigate treatment without the ease of cashless care at some of India’s leading hospitals.
