Star Health becomes 4th insurer to face hospital pushback over cashless services

Star Health becomes 4th insurer to face hospital pushback over cashless services

Star Health and Allied Insurance may soon face suspension of its cashless service arrangements after the Association of Healthcare Providers, India (AHPI) accused the insurer of engaging in unfair practices.

AHPI, which represents more than 15,000 hospitals, has given the insurer until 22 September to address the grievances, failing which hospitals could stop offering cashless facilities to Star Health policyholders.

Hospitals under the ambit of APHI now allege that Star Health has continued to enforce outdated tariff rates despite rising costs and, in some cases, has pressured providers to accept even lower rates.

Other complaints include arbitrary denials of cashless approvals, unjustified deductions, rejection of claims even after approvals, and anti-competitive collective bargaining tactics that limit fair negotiations on tariffs.

Star Health responded to the allegations, and said, “It is unfortunate that AHPI has chosen to issue threats of suspending cashless services in a manner that is arbitrary, lacking clarity or actionable details. AHPI’s abrupt press statement has only prejudiced the interests of policyholders across the country and created unnecessary confusion. We want to reassure our customers that their access to healthcare through Star Health will not be impacted. Tariff negotiations and billing practices are a regular activity between insurers and hospitals. However, AHPI’s approach of targeting individual insurers disrupts patient care instead of enabling constructive solutions."

"Our priority at Star Health remains to safeguard policyholders’ interests and ensure continuity of treatment. We are committed to dialogue with hospitals and stakeholders, but firmly believe that patient care should never be compromised by pressure tactics. Star Health has partnered with over 14,000 hospitals for nearly two decades to deliver affordable and accessible healthcare to millions of Indians, in full compliance with IRDAI’s stringent regulatory framework,” the company added.

However, Star Health did not respond to specific queries on whether discussions with AHPI had been initiated and the concerns flagged in the Insurance Ombudsman’s 2023-24 report.

This is not the first time AHPI has clashed with insurers.

In August, Bajaj Allianz General Insurance, Care Health Insurance, and Niva Bupa Health Insurance were also warned of similar action by AHPI. Moneycontrol earlier reported that Bajaj Allianz later faced a temporary suspension of its cashless services before resolving the dispute, while it remains unclear whether Care and Niva Bupa reached a formal settlement with the association.

Hospitals vs insurers: All you need to know about the ongoing tiff

Star Health, however, has already been under scrutiny for its claims practices, with growing concerns from both regulators and policyholders over the company’s approach.

According to the insurance ombudsman’s 2023-24 annual report, Star Health recorded around 13,300 complaints, more than 10,000 of which were related to outright claim rejections. This figure was higher than the combined total complaints against the next four largest health insurers.

While the suspension has not yet taken effect, failure to resolve the dispute by the deadline could force customers to fall back on the reimbursement mode of settlement.