Now, Star Health Insurance could have its cashless services suspended over ‘unfair practices’

Star Health and Allied Insurance faces the prospect of having its cashless services revoked by the Association of Healthcare Providers, India (AHPI) for allegedly unfair practices.

AHPI, which represents more than 15,000 hospitals, warned it would withdraw cashless services for Star Health policyholders from 22 September over complaints of unfair practices unless it reached an agreement with the insurer by then.

In August, Bajaj Allianz General Insurance and Care Health Insurance had separate altercations with AHPI over delays in claim settlements, delays in empanelling new hospitals, unrevised package rates, demanding unnecessary documentation, and pressure to further reduce tariffs. Both were warned that their cashless services would be withdrawn, but eventually resolved their issues through talks.

Now, member hospitals of AHPI allege Star Health has refused to revise outdated tariffs in line with rising costs, put pressure on them to reduce rates further, arbitrarily denied cashless services, made unjustified deductions and rejected claims even after final approval. AHPI accused it of indulging in anti-competitive collective bargaining to suppress tariffs, undermining fair negotiations.

Quoting the insurance ombudsman’s 2023-24 report, AHPI said Star Health topped the grievance chart with 13,300 complaints, more than 10,000 of which related to claim rejections—more than the combined complaints against the next four largest health insurers.

Dr. Girdhar Gyani, director general of AHPI, said, “The systemic failure of Star Health Insurance to address grievances, combined with unfair practices, leaves us with no choice but to act. Our responsibility is to protect both patients and providers.”

What policyholders should know

Cashless services have not been suspended yet and could be avoided if Star Health resolves its issues with AHPI. The insurer had received similar notices in the past from other medical associations, which they eventually resolved.

Mint has reached out to Star Health for comment and will update this story when the company responds.

Moreover, even if cashless access is withdrawn, reimbursement mode will still remain available. Given the recurring disputes between hospitals and insurers, customers should maintain an adequate emergency fund, experts suggested. “Cashless is not a guaranteed benefit, only a service—but reimbursement is always available,” said Prashant Mhatre, all-India president at General Insurance Agents Federation Integrated.