Thiruvananthapuram: A directive from the Centre to state govts has put private hospital billing under the spotlight. The Union department of financial services, in a letter dated April 8, 2026, to chief secretaries of all states and Union Territories, has called for uniform package rates for common medical procedures and transparent billing in private hospitals, identifying inconsistent pricing as a key factor driving up health insurance premiums.
The letter notes that while India’s health insurance market is growing at around 9% annually, with premium volumes crossing Rs 1.2 lakh crore in 2024-25, rising healthcare costs are simultaneously creating an affordability problem for policyholders.
Calling for regulatory tightening within the existing legal framework, the Centre has urged states to enforce provisions of the Clinical Establishments Act, 2010 and push for standardised package rates across hospitals. It has also stressed the need for stronger grievance redressal mechanisms to address disputes among hospitals, insurers and patients.
A significant part of the letter addresses the lack of standardisation in treatment protocols. Citing the Clinical Establishments Rules, 2012, it states that hospitals are required to follow standard treatment guidelines issued by central and state govts. Adherence to these guidelines, it says, would reduce variations and unnecessary procedures and help contain claim costs.
The Centre has also called on states to ensure hospitals adopt digital systems for claims processing, specifically through the National Health Claims Exchange (NHCX) platform, to standardise health insurance data flows and improve transparency across stakeholders. Taken together, these measures are expected to standardise care quality, foster patient trust and lower overall claims exposure.
Public health experts, however, say implementation will be the real challenge. “The absence of a credible medical and financial audit system makes it difficult to bring uniformity to treatment packages, including doctors’ fees, in the private sector. This can be addressed through a joint mechanism involving the IMA and the govt. An independent regulatory body with medical, legal and administrative experts is essential to evaluate practices and bring in meaningful standardisation,” said Dr S S Lal.
The push on billing transparency comes alongside broader health sector reforms under the Centre’s “Compliance Reduction and Deregulation” initiative. Under Phase II, the Centre has proposed allowing practitioners registered with any state medical council to practise across states without fresh registration, aimed at easing doctor shortages in rural and border areas. It has also proposed a single-window clearance system for healthcare establishments, replacing the current requirement for approvals under multiple laws.
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