J&K private hospitals threaten to stop Ayushman Bharat services due to non-payment of Rs 300 cr by govt

Srinagar : The empanelled private hospitals of Jammu and Kashmir have threatened to halt their services under the Ayushman Bharat scheme starting September 1, 2024, due to non-receipt of funds since March this year.
The association of empanelled private hospitals announced its inability to continue services beyond the end of August, claiming that the government owes them Rs 300 crore.
A member of the association of hospitals and dialysis centres empanelled under the Ayushman Bharat Scheme said that since March 15, 2024, funds amounting to approximately Rs 300 crore under the Ayushman Bharat Scheme have not been released, which has led to severe financial strain on their resources. “For the past six months, we have exhausted all available means to continue providing services under this scheme,” he said.
“Unfortunately, a prolonged legal battle between the government and the insurance company, IFFCO Tokio, has delayed the resolution of this issue. Despite the matter being of utmost public health importance, the payments for wrongfully rejected and deducted cases have not been released by IFFCO Tokio, even though the State Health Agency has issued orders for the same,” he added.
The association said that under these circumstances, they would not be able to cater to Golden Card patients beyond August 31, 2024, until the payments are released, as their suppliers, who have supported them on credit until now, have categorically denied extending credit beyond this date.
It expressed commitment to the Ayushman Bharat Scheme and providing the best possible care to all patients. However, until the funds are released and their suppliers and creditors resume their services, the association said, they will only be able to offer services on a cash basis.
Last November, IFFCO-TOKIO General Insurance Company, the insurer for Ayushman Bharat in J&K, informed the SHA authorities of their decision not to renew the contract after its expiry on March 14, 2025.
Initially, the scheme was implemented through Bajaj Allianz GIC, whose contract ended in 2022. IFFCO-TOKIO was subsequently brought in but attempted to exit the scheme, citing financial losses. Despite SHA’s requests for them to continue in the interest of patient care, the company refused.
The SHA approached the High Court to stay the exit, but the petition was dismissed on February 2, complicating matters further for both SHA and beneficiaries across the union territory. The government has since approached the division bench to stay the single bench order, making the issue sub-judice. They have urged higher authorities to address the issue and release pending funds promptly.
According to officials, 1,500 patients benefit from this scheme daily in J&K, and services will continue for these patients.
Sanjiv M Gadkar, Chief Executive Officer (CEO) of the State Health Agency, Jammu and Kashmir, said that private hospitals’ dues are around Rs 165 crore as of now.
“We have assured all the private hospitals that they were paid regularly for the last four years without delay. But due to the ongoing legal case, the payments are delayed, which we have assured them to pay immediately after the court order,” he said.
“The High Court has kept the matter for orders, and orders are likely to be issued at any time in the coming week. I feel the issue will be resolved before August 31, and the scheme will run smoothly without any interruption,” he said.
The CEO SHA added, “We have a budget provision of Rs 500 crore, and payment to hospitals is not an issue. There is only a technical issue that the court will decide, and accordingly, the matter will be resolved.
Gadkar further said that all efforts are being made in this regard, but the matter is lying before the High Court. “I express gratitude to all private hospitals for their support and cooperation with the department in this critical situation,” he said