The Association of Healthcare Providers – India (AHPI), representing over 15,000 hospitals and healthcare institutions across the country, has issued a formal communication to Star Health Insurance outlining persistent issues faced by member hospitals.
According to AHPI, these include refusal to revise tariffs for several years in line with prevailing healthcare cost inflation, pressure to further reduce outdated tariffs, arbitrary withdrawal of cashless services, unjustified deductions from hospital bills, and claim rejections after final approval.
AHPI stated that these issues may lead to compromised patient safety and quality of care at member hospitals.
The association announced that AHPI and its member hospitals will withdraw cashless services for policyholders of Star Health Insurance effective 22 September 2025, unless the insurer takes definitive steps to address the concerns in a timely manner.
This decision follows repeated complaints from member hospitals regarding what AHPI described as Star Health Insurance’s questionable practices. AHPI listed coercive demands to reduce rates at the expense of patient care, frivolous queries undermining doctors’ clinical judgement, unexplained deductions on approved claims, and abrupt withdrawal of cashless services. The association said these practices have caused disservice and hardship to patients and families.
AHPI also raised concerns about anti-competitive conduct, stating that Star Health, often in concert with other insurers, engages in collective bargaining practices designed to suppress hospital tariffs. According to the association, such practices distort the market, undermine fair negotiations, and go against competition law principles.
Citing the Insurance Ombudsman Annual Report 2023–24, AHPI highlighted that Star Health Insurance had over 13,300 complaints in FY24, with more than 10,000 relating to partial or full claim rejections. The association said this number exceeded the combined complaints against the next four largest health insurers.
Explaining the rationale for the decision, Dr Girdhar Gyani, Director General at AHPI, said:
“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. Our primary responsibility is to safeguard the interests of both patients and healthcare providers. No insurer should be allowed to jeopardise patient care or undermine the financial viability of hospitals for commercial gain.”
AHPI clarified that in the event of suspension of cashless services, member hospitals will continue to treat Star Health Insurance policyholders at self-pay rates, with patients required to seek reimbursement from the insurer post-discharge.
The association also urged member hospitals to support affected patients by facilitating alternate payment and reimbursement channels if required.
“We remain open to constructive engagement and look forward to a positive resolution in the best interests of patients and healthcare providers alike,” added Dr Gyani.