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While issues stand resolved for now, several contentious issues between hospitals and the health insurance industry, continue to hang fire
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The cashless insurance standoff now brews between the Association of Healthcare Providers – India (AHPI) and Star Health Insurance, over complaints involving treatment tariffs and alleged suspension of cashless insurance.
Major hospital-chains have been dropped from Star Health’s cashless insurance service over tariff related issues, leaving policy-holders in a difficult situation, said Girdhar Gyani, AHPI, Director General, urging them to restore services and dialogue with the hospitals. If differences between the two do not get resolved, AHPI said, it would advise member hospitals to withdraw Star Health’s cashless services from September 22nd.
Star Health and Allied Insurance Company Ltd, however, said “we have not received any case of cashless suspension from our network partners with whom we have bilateral agreements.” Instead, it said, “AHPI has chosen to issue threats of suspending cashless services in a manner that is arbitrary, lacking clarity or actionable details.” Further, it added, “AHPI’s abrupt press statement has only prejudiced the interests of policyholders across the country and created unnecessary confusion.”
The Star Health insurance company statement assured its customers that their access to healthcare will not be impacted. “Even if this were to happen, we will ensure that customers get their claim payments before paying the hospital,” it added.
Similar standoffs
The AHPI represents over 15,000 hospitals and healthcare institutions across the country, and had raised similar issues with Bajaj Allianz and Care Insurance, less than a month ago. The issues stand resolved for now, but several contentious issues between hospitals and the health insurance industry, continue to hang fire.
Gyani told businessline, a meeting between the AHPI and the General Insurance Council, on outstanding issues, would possibly take place later this month.
On the formal communication to Star Health Insurance, listing persistent issues faced by member hospitals, AHPI alleged, they included a “continued refusal to revise tariffs for several years in line with prevailing healthcare cost inflation, pressure to further reduce outdated tariffs, arbitrary withdrawal of cashless services, unjustified deductions from hospital bills and claim rejections post final approval.”
Other concern areas alleged by AHPI included “coercive demands to further reduce rates at the expense of patient care, the raising of frivolous queries that undermine treating doctors’ clinical judgement, unexplained deductions on approved claims, and abrupt withdrawal of cashless services from member hospitals.”
The AHPI statement cited the Insurance Ombudsman Annual Report 2023-24 where, it said, Star Health Insurance “topped the list with over 13,300 complaints in FY24, over 10,000 of which related to partial or full claim rejections—a number exceeding the combined complaints against the next four largest health insurers.”
Gyani said, “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. … No insurer should be allowed to jeopardise patient care or undermine the financial viability of hospitals for commercial gain.”
AHPI also clarified, that treatment would continue at its hospitals, even if cashless services were suspended, which could then be reimbursed by the insurer.
Published on September 12, 2025
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