Healthcare providers have urged the Government to make a budgetary allocation to settle payments due to them for services provided through the Government schemes.

“It is painful that reimbursements for completed treatments under these schemes are not made on time, and in most cases, remain unpaid even for 2-3 years (in some cases even up to 6 years), causing severe stress on working capital and cash flows for private healthcare providers,” said Nathealth, a federation of private healthcare service providers, in their submission to the Government ahead of the Union Budget 2023.

They urged the Government to consider a one-time, accelerated budgetary allocation for clearing past dues under CGHS and ECHS (up to an ageing of 90 days) in the forthcoming budget. Private healthcare providers will ensure that all claim details are made transparent and available, and a one-time resolution is seamlessly completed, they added.

This has been a long standing demand from healthcare providers and some reports peg the Government dues to hospitals at about ₹1,400 crore.

The healthcare platform also called for GST-linked streamlining. “Unlike in other sectors, the healthcare sector has not been able to derive the benefits of GST transition. In fact, the embedded taxes in the healthcare sector have increased in the post-GST regime compared to pre-GST scenario,” Nathealth said. It recommended two options”: an “Imposition of a 5 per cent GST merit rate at the output healthcare services for all healthcare establishments (both private and government) with the option to claim full input tax credits”; “levying of a 5 per cent GST rate on output services for all private hospitals and an optional dual rate structure for Government healthcare establishments.”

Another key point that Nathealth highlighted was the Government’s stated intent of increasing healthcare spends to 2.5 per cent of GDP, by 2025. Pointing out that 48 per cent of the population travels 100 kilometers to access healthcare, Nathealth said, increasing coverage of insurance in tier 2-3 towns would drive capacity growth “as high-quality providers will have confidence in the paying capacity of the patients.” Further, they point out, “There are opportunities to build asset-light models powered by digital technologies improving access and affordability with appropriate reimbursement and financing models.”