Fraud and flaws mar Ayushman Bharat scheme

THE Ayushman Bharat-PM Jan Arogya Yojana (AB-PMJAY) scheme has been riddled with controversies. In February, over Rs 1 crore of funds meant for beneficiaries under the scheme were siphoned off using fake bills, forged documents and data of discharged patients at the PGI, Chandigarh. A few months ago, the National Health Authority's anti-fraud unit had detected 2.7 lakh claims from private hospitals from across the country which were inadmissible because of fraudulent components. These two instances are just the tip of the iceberg.

Launched in 2018, the AB-PMJAY provides annual health coverage worth Rs 5 lakh per family per year for secondary and tertiary care hospitalisation, benefiting about 12.37 crore families from the bottom 40 per cent of India's population. Last year, its ambit was expanded to include all citizens above 70 years, irrespective of the financial status. It provides cashless but only in-patient medical care, covering close to 2,000 procedures across 27 medical specialties. Around 30,000 public and private hospitals have been empanelled under the scheme.

While the AB-PMJAY is the world's largest health insurance scheme fully financed by the government, it has not lived up to the expectations. Many states have similar insurance schemes operating successfully. Also, while the budget for the scheme has increased from Rs 7,299 crore for 2024-25 to Rs 9,406 crore in 2025-26, it falls short and the actual utilisation per beneficiary remains suboptimal. On an average, each beneficiary has been provided treatment worth Rs14,000-16,000.

Since the scheme intends to provide secondary and tertiary treatment, a big limitation is inadequate infrastructure. Low government spending on health, shortage of doctors and nurses and non-upgradation of hospitals and government medical colleges are the key reasons for poor healthcare delivery in India.

There is a wide urban-rural divide as well in the implementation. Semi-urban and rural areas lack trustworthy medical infrastructure, with little investment in the private sector. Enrolment of rural people in the scheme is also lower.

To supplement the scarce public infrastructure, the government had empanelled private hospitals and they account for 45 per cent of all empanelled hospitals. However, that has led to many problems. The charges for each procedure and hospitalisation have been fixed at rates much lower than what is sustainable for private hospitals in providing quality care. Plus, they have not been revised since 2018.

Doctors point out that the cost of treatment in a metro city cannot be compared with that in a small town, keeping in mind the cost of running a hospital. A major grouse of private hospitals is that there is a delay in reimbursements and exclusions are made in claimed amounts.

In Kerala, Maharashtra and Haryana, many private hospitals have withdrawn from the scheme because of non-payment of dues.

It is noteworthy that none of the renowned private hospitals in the Chandigarh region is empanelled. It's the smaller hospitals in smaller towns which accept AB-PMJAY cards. Many of them have dubious credentials and are poorly equipped. At times, they don't meet the quality standards of the scheme.

Many hospitals resort to unethical practices, too. For example, they hold camps and wrongly label patients as having a critical illness. In a Gujarat hospital, some such patients were subjected to coronary angioplasty, resulting in the death of two. Quite often, patients are shifted to ICUs for inappropriate indications since reimbursement for the general ward is very low.

The Parliamentary Standing Committee on Health and Family Welfare had expressed concern in March this year about the way some hospitals were doing fraudulent activities as part of their business model. The National Health Authority's anti-fraud unit has recommended that nearly 600 hospitals across India be suspended from the panel, over 1,000 removed and penalties of Rs 122 crore levied on 1,504 errant hospitals.

Corrupt practices abound in many government hospitals, too. There are middle men offering help in getting AB-PMJAY cards; there are gangs which falsify data, generate fake bills and even purchase orders. In the scam reported from the PGI earlier this year, doctors' and nurses' signatures, stamps and indents were faked to procure drugs. One is reminded of the 2012 NRHM scam of UP in which over Rs 10,000 crore of Central funds was siphoned.

The scheme was launched with a flourish. But the ground realities, like regional variations and the capacity of existing infrastructure, were not taken into account. It was assumed that private hospitals would fill the void of the inadequate public sector. It was not envisaged that arbitrarily low packages and bureaucratic delays on the one hand, and fraud or corruption, on the other, could put a spanner in the works.

Remedial measures must be taken to ensure the success of the scheme. First, public healthcare delivery must be strengthened with more investment in infrastructure. Second, tariffs must be revised and rationalised, taking regional factors into consideration. The claims of private hospitals should be reimbursed in the stipulated time period or they should be paid interest on the pending amount. The system of registration, approval of hospitalisation and treatment and validation should be conducted online. If private insurance companies can effectively scrutinise all the claims, the same can be done here also.

Regulatory mechanisms are needed to prevent fraud. Multistep authentication can be built into processing each case, like what is done by online payment gateways. Artificial intelligence can be used to analyse data from hospitals to detect fraud. Punitive measures like penalties and de-empanelment of hospitals should be promptly enforced once a fraud is detected. Random physical inspections should be carried out to ensure compliance with quality standards and fair delivery of services.

Unless the government addresses the inherent weaknesses of the scheme, it will lose its lustre.

Rakesh Kochhar is ex-President, Indian Society of Gastroenterology.