State owes ₹923 crore to over 1100 pvt hosps under MJPJAY

Maharashtra owes ₹923 crore to private hospitals under MJPJAY, causing reluctance to admit patients due to delayed payments amid budget cuts.

MUMBAI: The sizeable purse allocated to several welfare schemes ahead of the Assembly election in 2024 has impacted many mainstay government schemes.

State owes ₹923 crore to over 1100 pvt hosps under MJPJAY

It has now come to the fore that a cash-strapped Maharashtra government owes ₹923 crore to 1144 private hospitals empanelled under the Mahatma Jyotiba Phule Jan Arogya Yojana (MJPJAY), the public health insurance scheme that covers over 2.8 crore financially underprivileged families. In a cascading effect, this has led to a reluctance among private hospitals to admit patients under the scheme.

The impact on the health scheme is the result of the government’s budget cut by at least 20% from the overall ₹8.2 lakh crore allocated for FY 2024-25.

The state government which spends ₹3100 crore annually on the scheme, has not settled bills of many private hospitals since July 2024. Over 5 lakh people are its beneficiaries for which the government incurs the annual expenditure of over ₹1800 crore; the remaining funds are spent on establishment costs, salaries and remunerations of agents appointed to help patients. The state government has paid ₹815.74 crore, leaving bills of ₹923.58 crore yet to be paid.

An official from Mantralaya told HT: “The bills have not been settled despite our constant follow-ups. There are 1792 empanelled hospitals under the scheme, which carry out over 1600 procedures. Of the total empanelled hospitals, 1144 are private, which are facing challenges in admitting more patients under the scheme because of unpaid bills. Many have started refusing patients and admissions are done only after political interventions.”

The officer added, although the government is expected to release a tranche of the instalment of the unpaid claims this week, it would not cover the entire dues. An official from the public health department added, as a result of this state of affairs, the government may find it difficult to add more hospitals to its list.

“In a war room meeting on February 1, chief minister Devendra Fadnavis asked the department to add 2300 more hospitals across the state to the scheme, but with the delay in payments to hospital owners, especially in urban areas, we fear that response may be poor,” said the official from the public health department.

The officer added, MJPJAY, which was launched in July 2012, was operated by a state owned insurance company – United India Assurance -- and the payments to the hospitals were regular initially. “Subsequently, the insurance company was suspended as the claims’ rejection rate and the premium became high. The government took over the scheme, promising to pay hospitals directly. But since then, the settlements have been delayed.”

This was corroborated by a senior doctor, who is a part of the management of a Mumbai suburban hospital. He said, “Since the government suspended the insurance company and took it upon itself to pay the hospitals directly, the payments have been delayed by months. Earlier, the payments would be cleared in three weeks.” He added that while “Mumbai hospitals are managing to survive, those in the Tier-2 and -3 cities, dependent on the scheme, are suffering a lot.”

While public health minister Prakash Abitkar was not available for comment, an official from the department, said: “The minister has held a meeting with finance minister Ajit Pawar and convinced him to release the funds. We expect it to go through soon.”

When HT reached out to Ashish Jaiswal, minister of state, finance, to comment on the state’s finances, he said, “There are financial problems, but we have been releasing funds as much as possible. I am not aware of the MJPJAY in particular, but we will release the pending amount soon.”