Medical Association forum petitions IRDAI over insurers’ tariff fixing

The Delhi Medical Association Nursing Home Forum (DMA NHF) has filed a complaint with the Insurance Regulatory and Development Authority of India (IRDAI), accusing health insurers of collectively fixing hospital tariffs through the General Insurance Council (GIC).

The Forum said such collective action restricts hospitals from negotiating individual rates and could compel them to operate at unsustainable prices. This, it said, not only threatens the viability of private healthcare providers but could also compromise the quality of care delivered to patients. The move raises concerns of cartelisation under India’s competition law.

DMA NHF has urged IRDAI to investigate the role of the GIC, examine potential abuse of dominant position by insurers and ensure hospital tariffs are adjusted in line with inflation. It also called for protection of patient interests by ensuring uninterrupted access to cashless services and requested the Serious Fraud Investigation Office (SFIO) to launch a parallel inquiry.

“With private insurers controlling over 50 per cent of India’s health insurance market, the insurers are misusing their dominant position to impose unilateral tariffs. This so-called common empanelment strips hospitals of their right to negotiate independently, artificially suppresses tariffs and threatens the sustainability of quality healthcare services,” said Dr V K Monga, Chairman of the DMA NHF.

“Instead of promoting competition and protecting patient interests, insurers are hiding behind IRDAI circulars to justify bargaining as a group. This misuse of regulatory directives undermines the Competition Act and IRDAI’s very own mandate,” he added.

The Forum alleged hospitals are being forced to provide cashless services under expired contracts at outdated tariffs, straining their operations. It also pointed out insurers reportedly spent only 54 per cent to 67 per cent of premium income on claim payouts in FY 2024-25, with the remainder absorbed by commissions and administrative expenses.

DMA NHF has urged IRDAI to take urgent steps to allow hospitals to negotiate directly with insurers, restoring fairness and sustainability to the system.