GI Council backs Star Health, urges hospitals to withdraw threat to suspend cashless services

Cashless clash: GI Council steps in to protect Star Health policyholders

The standoff between hospitals and health insurers has intensified, with the General Insurance Council (GI Council) throwing its weight behind Star Health and Allied Insurance. The industry body has urged the Association of Healthcare Providers (India) (AHPI) to withdraw its warning that threatens to suspend cashless services for Star Health policyholders.

Cashless facilities allow patients to receive treatment without paying upfront, with insurers directly settling bills with hospitals. Losing this benefit would be a major blow to lakhs of policyholders, particularly in emergencies where immediate care is critical.

AHPI’s warning and Star Health’s troubles

AHPI, which represents more than 15,000 hospitals across India, issued its warning earlier this week. It said member hospitals would stop offering cashless treatment to Star Health customers if disputes were not resolved by September 22, 2025.

The move targets Star Health, which already faces scrutiny over customer complaints. According to the Council of Insurance Ombudsman’s latest annual report, Star Health topped the list of grievances in FY2023-24, with 13,308 cases filed — more than 10,000 of them related to partial or complete claim rejections.

Hospitals have accused Star Health of forcing steep tariff cuts, making unexplained deductions on approved claims, and even withdrawing cashless services without notice. “Such practices have caused severe hardship to patients and their families,” AHPI said.

Insurers push back: hospitals accused of overcharging

Insurers, meanwhile, argue that many hospitals are inflating bills and driving up medical costs. They say hospitals often resist providing cost justifications, leaving insurers to absorb expenses that are out of line with treatment benchmarks.

The GI Council said disputes over pricing and tariffs are part of regular business negotiations but should never impact patient care. “Tariff negotiations and billing practices are regular business activities between hospitals and insurers and should never be used to compromise patient care,” it said.

Mediation efforts stalled

The GI Council had attempted to mediate earlier this month, scheduling a meeting with AHPI on September 2 to resolve differences. AHPI postponed the talks, with no new date confirmed. Despite this, the association proceeded with its warning, prompting the Council to accuse it of choosing “disruption over collaboration.”

The council said Star Health policyholders would continue to have uninterrupted coverage and access to healthcare, stressing that any suspension of cashless services would directly harm families by forcing them to pay hefty advance deposits during hospitalisation.