Telangana’s new EHS may face hurdles over hospital reimbursement rates

Telangana's new Employees Health Scheme has been launched with digital health cards and a centralised portal, but private hospitals warn that low reimbursement rates and pending dues could lead to delays in treatment unless the government revises the pricing structure

Hyderabad: While the State government’s new Employees Health Scheme (NEHS) went live on Friday, July 17, with the distribution of digital health cards and a centralised portal, the promise of cashless medical care could remain a non-starter.

With the rates offered under the new EHS not being in sync with what has been proposed by private hospitals, there is a possibility of a “silent denial” of care, where private hospitals do not officially boycott the scheme but avoid providing treatment to patients under the guise of “bed shortages” and administrative delays for complex procedures that are financially unviable.

---

The State government’s offer to private hospitals is based on the Central Government Health Scheme (CGHS) tariff, which was fixed years ago, ignoring the fact that the actual cost of running a private hospital has increased sharply over the years.

For instance, the State government rate for a percutaneous coronary angioplasty (heart procedure) is Rs 75,700, while the actual cost for a private hospital, including equipment and other operational expenses, is around Rs 1,25,000.

The gap between what is being offered by the State government and what has been proposed by members of the Telangana Network Hospitals Association (TANHA) extends across multiple healthcare specialties. For example, a craniotomy is reimbursed at Rs 50,635, while the total cost for a private hospital is around Rs 75,000.

These gaps, according to TANHA, are forcing mid-segment hospitals either to absorb substantial losses on every patient they treat or avoid admitting such patients altogether.

“We are providing services far below our scientific costing analysis. This is a service to society, but when the State government rate doesn’t even cover the cost of medical management, hospitals simply cannot sustain the operations required for critical patients,” said Dr Rakesh Vaddiraju, president of TANHA.

Members of TANHA are advocating a data-driven, collaborative approach to pricing.

As the government continues to delay payment of a reported Rs 2,600 crore in pending medical bills, the success of the EHS is likely to depend on whether it can move beyond arbitrary rate cuts and engage with the actual costs of modern medicine, which include not just medicines but also staff salaries, building rent and specialised operation theatre charges, senior public health commentators said.