Complaints mount against ex-servicemen contributory health scheme

ECHS (representative image)

On December 4, South Goa Member of the Parliament (MP) Captain Viriato Fernandes (retd), told the Lok Sabha that Goa’s only hospital, empanelled with Ex-Servicemen Contributory Health Scheme (ECHS), has halted services to defence veterans owing to non-payment of bills amounting to Rs 5.2 crore by the defence ministry.

Fernandes noted that the root cause for the halt in services is the “systemic failure of the defence ministry to release ECHS funds in a timely and adequate manner”.

The same was echoed by the Comptroller and Auditor General (CAG) of India. On December 18, in a report tabled in the Parliament, the CAG said that there were delays in payment to empanelled hospitals and reimbursement of individual claims of beneficiaries. And this resulted in empanelled hospitals opting out of the ECHS.

Moneycontrol spoke to several defence veterans to understand the key issues, with respect to the ECHS, that is causing hardships to the retired defence personnel, and they highlighted that some empanelled hospitals are not providing adequate treatment to the veterans, as the defence ministry has not cleared their past dues. They also said that many polyclinics, part of the ECHS, are inadequately staffed which is causing hardships to the veterans.

A senior government official, in the ECHS’ nodal office in New Delhi, told Moneycontrol that clearing of dues is a "continuous process".

"We are in touch with the hospitals, and it will be cleared within a timeframe. There is a fixed allocation for the ECHS every year in the Budget. If needed, it will be increased," the official explained. In 2024-25, the revised estimate for ECHS was pegged at Rs 9,429 crore, and in 2025-26, the Budget estimate is pegged at Rs 8,317 crore.

"Moreover, there are some bills by hospital which are fake. So sometimes, overpayment is done. That’s why, it takes time for payments to be cleared," the person added.

ECHS--launched on April 1, 2003--is a government-funded healthcare program in India designed to provide comprehensive, cashless medical care to retired Armed Forces personnel and their eligible dependents. At present, the total strength of the ex-servicemen and their dependents across the country is around 67 lakh.

To join the scheme, which is compulsory for retired defence personnel after April 1, 2003, members pay a one-time fee based on their rank at retirement. Currently the payment ranges from Rs 30,000 to Rs 1,20,000. Post joining, every member is issued a smart card that stores their medical history and serves as their identity for accessing healthcare nationwide.

The defence veterans are provided treatment through ECHS Polyclinics (for outpatient care), empanelled Hospitals, and military Hospitals. According to the defence ministry website, there are nearly 3,500 hospitals across India empanelled with ECHS.

Essentially, an empanelled hospital is a private or government healthcare facility that has a Memorandum of Agreement (MoA) with the defence ministry to provide medical services to ECHS beneficiaries at pre-fixed government rates. Since ECHS is a cashless scheme, these hospitals do not charge the veteran; instead, they bill the government directly.

"We have seen empanelled hospitals, don’t get their bills cleared through the ECHS on time. This is the reason, why many empanelled hospitals are getting de-empanelled, and no new hospital is willing to be onboarded," Commander VK Santhanam (Retd) told Moneycontrol.

"The hospitals need to be sensitized about the scheme. They only care about profits, but they should take pride in serving the defence veterans," he added.

"The government must allocate sufficient resources for ECHS, if it genuinely cares for defence veterans. Empanelled hospitals must be paid in a timely manner," said Commander Vikram Karve (retd).

On X, Admiral Arun Prakash (retd) wrote last week that "urgent review of the limping ECHS is certainly required", as the defence ministry is not ensuring "uninterrupted functioning" of the scheme through empanelled hospitals.

"ECHS, seems an unusual & arbitrary scheme! Membership is 'compulsory' & 'contributors' cough up between Rs 30,000 and Rs 1,20,000 as fee for healthcare. But there is, apparently, no obligation on MoD/DESW to ensure uninterrupted functioning of scheme via empanelled hospitals?," Admiral Arun Prakash (retd) said.

In a circular, issued in 2023, the nodal office of ECHS in New Delhi, said that empanelled hospitals have to file their claims to the ECHS within 60 days of the treatment, based on which the dues are cleared. There is, however, no clear timeline by when the defence ministry—through ECHS—releases the funds.

An earlier report by the Comptroller and Auditor General of India (CAG), in 2015, had said "on scrutiny of the paid medical bills (manual/offline) for the years 2012-13 to 2014-15 in selected Station Headquarters (ECHS Cell) and Principal Controller of Defence Accounts/Controller of Defence Accounts revealed that the empanelled hospitals claimed bills in excess of the authorised package rates, and the same were admitted by the concerned SHQs (ECHS Cell). We observed an overpayment to the tune of Rs 1.92 crore at 20 station selected in audit."

However, in the latest report (dated December 18, 2025), the CAG flagged that there were delays in payment to empanelled hospitals and reimbursement of individual claims of beneficiaries owing to shortage of allocation under "Medical Treatment Related Expenditure (MTRE)", leading to recurring Carried Forward Liabilities (CFLs) in each financial year.

In the ECHS accounting system, Medical Treatment Related Expenditure (MTRE) is the specific amount used exclusively to pay for the actual healthcare services provided to veterans. This figure is, however, not disclosed on the website, or any public document.

"Based on recommendation of audit, Ministry informed (CAG) that it had taken up the matter for a one-time allocation of sufficient fund under MTRE to eliminate/reduce CFLs,” the CAG said in a press release. The full report is not yet out on the CAG’s website.

The latest CAG report has also highlighted the deficiencies in polyclinics—which provide cashless OPD services to veterans. As per the press release, the CAG noted that despite increase in number of ex-servicemen, the size and manpower of Polyclinics was not revised since inception of Scheme in 2003. "(Defence) Ministry informed that sanction had been accorded (November 2024) for additional 1,357 manpower for 23 new Polyclinics and 50 upgraded Polyclinics by way of corrective action," the release said.

According to defence ministry, there are 427 Polyclinics in India sanctioned by the Government. "ECHS Polyclinics are designed to provide 'Out Patient Care' which includes consultation, essential investigation and provision of medicines. Specialized consultations, investigations and 'In Patient Care' (Hospitalization) is provided through spare capacity available in service hospitals/government hospitals/private hospitals empanelled with ECHS," the ministry says on its website.

The CAG further noted that there were instances of short supply of medicines to Polyclinics by Service Hospitals, deficiencies of equipment, operation of very old ambulances and problems in operating Mobile Medical Units. "Ministry replied that provision to procure medicines for six months rather than the previous provision of three months will improve the medicine delivery and a case for replacement of 31 ambulances against Beyond Economic Repair (BER)/downgradation had been taken up," the press release said.

“There was also persistent under-utilisation of capital budget despite availability of land at multiple locations to construct Polyclinic’s buildings. Ministry informed for construction of permanent buildings for 48 ECHS Polyclinics,” it said.

Lt Col RK Bharadwaj (retd) said: “The gaps in polyclinics has remain unaddressed for many years. There is a lack of medicines in these clinics always.”

Commander VK Santhanam (retd) explains: “If we buy the medicines from some private pharmacy, we don’t get full reimbursement from ECHS on time. At max, we get reimbursement for medicines bought for consumption for one month, but if we have to buy medicines for more than that period, based on doctor’s prescription, we won’t be reimbursed," he added.

“In these clinics, the doctor don’t treat us properly, because there are far less clinics for a large number of veterans. The manpower has to be increased immediately. Also, a full time helpline number should be made functional for ECHS beneficiaries,” he added.