New Delhi: Alleging arbitrary rejections of hospital bills and operations based on outdated tariff rates, the Association of Healthcare Providers – India (AHPI) has served a 10-day ultimatum to Star Health Insurance to resolve issues “undermining the financial viability of hospitals and jeopardising patient health.”
In a formal communication to Star Health, AHPI stated that the insurance provider has repeatedly refused to revise tariffs over several years in line with rising healthcare costs.
AHPI, which represents over 15,000 hospitals, including leading chains like Max and Fortis, has also received complaints of “arbitrary deductions by the insurance company from hospital bills even after final approval.”
“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 jeopardise patient care or undermine the financial viability of hospitals for commercial gain,” said Dr. Girdhar Gyani, Director General at AHPI.
Giving a 10-day ultimatum to resolve outstanding issues, AHPI has advised its member hospitals to take appropriate action, including withdrawing cashless services for Star Health Insurance policyholders, effective September 22, 2025.
However, the body clarified that services for cash-paying customers seeking reimbursement post-discharge will remain unaffected.
Responding to the allegations the company in an official statement said, “We have not received any case of cashless suspension from our network partners with whom we have bilateral agreements and AHPI has chosen to issue threats of suspending cashless services in a manner that is arbitrary,.”
“We reassure our customers that their access to healthcare through Star Health Insurance 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.
Notably, the turn of events comes just days after AHPI was locked in a similar deadlock with Bajaj Allianz Health General Insurance Company. At that time, it had urged members to suspend cashless services for Bajaj Allianz policyholders. The issue was later resolved after the insurer assured it would address various concerns through formal actions.
According to AHPI, India experiences an annual medical inflation of 7–8 per cent, driven by rising costs of consumables, utilities, and other overheads. Continuing operations on the same outdated rates creates an unsustainable situation for healthcare providers.
Meanwhile, insurers argue that pricing remains opaque, and costs vary across hospitals. They have long called for the establishment of a regulator to standardize treatment costs and resolve disputes.
