From Monday, the revised package rates of the Central Government Health Scheme (CGHS) will come into effect at hospitals that provide medical services under the scheme.
The recently announced revised CGHS rates for treatments and diagnostics, for example, come after about 10 years, and healthcare providers are hopeful it will herald discussions on issues including medical inflation and treatment tariffs, among other things.
Whether this price revision will encourage more private hospitals to support Government-run schemes in general, will depend on the impact of the CGHS revision on patients and hospitals, say hospital representatives.
A close watch is also being kept by them on reimbursement timelines – or the time Government takes to reimburse a healthcare provider for medical procedures done under the scheme, a representative with a pan-India private hospital said.
Hospitals have accepted the revised packages, but there are some concerns that have been represented to the Union Health Ministry, says Dr Girdhar Gyani, Director General, Association of Healthcare Providers of India (AHPI).
Though super specialty hospitals are allowed rates at 15 percent higher than NABH-accredited hospitals for super specialities in the same city category, it is still not on par with medical inflation, Gyani told businessline.
Other concerns include the reimbursement reduction for additional surgeries in the post-operative period to 75 percent, as compared to 100 percent earlier, he said.
In the case of multiple surgical procedures in one session, the second surgery is pegged at 50 percent, while the third and subsequent procedures would be at 25 percent, he said, as compared to no cap beyond the second procedure, earlier.
Ameera Shah, President at apex healthcare body NATHEALTH, and Executive Chairperson, Metropolis Healthcare, pointed to the GST relief, which along with the CGHS rate revision, addressed long-standing concerns of the sector.
“To build on this momentum, we suggest that CGHS and other government-sponsored schemes be periodically benchmarked to the Consumer Price Index (CPI), thereby ensuring predictability, sustainability, and a win–win value proposition for patients, providers, and policymakers,” she said.
Revised packages
The revised CGHS rates are applicable for all healthcare services at CGHS-empanelled Healthcare Organisations (HCOs); medical reimbursement claims of individuals – still serving, pensioners and other eligible beneficiaries, said the Centre’s note outlining rates for 2000-odd procedures. CGHS, cashless treatment would be available for Central Government pensioners and other specified beneficiaries, it added.
Kunal Gala, Partner, Deal Value Creation, BDO India, explained, “This policy introduces tiered pricing on the basis of hospital accreditation and city tier, as well as the type of the ward, thus materially increasing reimbursements to the well-accredited hospitals with due consideration to current healthcare costs and operating realities. It is not just a price adjustment; rather, by design, it can be a structural enabler that can change investor sentiment and deal-making dynamics in the private hospital sector of India.”
Further, he points out, “hospitals with high CGHS patient volume and high accreditation standards are likely to see their valuations rise, supported by better margins and more stable cash flows. Such targets may be prime considerations for strategic investors for an acquisition, joint venture, or minority investments to secure a steady government linked revenue stream. Smaller or perhaps, not-so-well-accredited hospitals, or hospitals limited to a region, may face consolidation pressure, creating avenues for sector consolidation, bolt-on acquisition, and platform-building by larger chains.”
Published on October 12, 2025