ET Wealth | A clash can put cashless claims at risk

An intravenous infusion set costing Rs.11.05 but selling for Rs.325 reveals a staggering markup of 2,841%. Similarly, a syringe valued at Rs.57.2, procured for just Rs.6.75 highlights the price discrepancy. Conducted by the Maharashtra Food and Drug Administration (FDA), a recent survey of hospital consumables brought this pricing gap to light.

FDA Commissioner Tukaram Mundhe recently highlighted this issue on X (formerly Twitter), reigniting the debate on hospital pricing practices and the financial burden on patients. The state FDA has called for a review of these findings and the establishment of clear guidelines on acceptable price differential margins.

Hospitals and doctors maintain that insurers question the necessity of treatments and make arbitrary deductions from claim amounts. Insurers, however, view Mundhe's post as proof of their longstanding claim that hospitals inflate bills, lack transparency, and result in disputes related to cashless claims. Nilesh Sathe, a former IRDAI member and Independent Director at Tata-AIA Life Insurance, argues that while Mundhe's focus was on consumables, it confirms insurers’ concerns about inflated hospital billing practices and the lack of transparency in billing procedures.

Hospital representatives claim that patients cannot purchase medications from other pharmacies due to restrictive practices, which allegedly justify medical authenticity or cold chain integrity. They maintain that these restrictive policies force consumers to pay excessive costs. On the other hand, doctors contend that healthcare costs vary based on patient conditions, procedure complexity, consumables, implants, and length of stay.

They argue that most charges are predefined in agreed tariffs for insured patients, and disputes arise when insurers disagree with specific charges or interpret agreed tariffs differently.

Corporate chains with in-house pharmacies are identified as the primary cause of high margins, leaving doctors with no control over these practices. Disputes and distress over inflated bills and opaque pricing are part of the problem. In July 2026, the General Insurance Council issued an advisory suggesting outpatient care for uncomplicated fever and infectious diseases, reserving hospitalization for cases of medical necessity.

However, this recommendation sparked a counter-offensive from hospitals and insurers, leading to a standoff over cashless facilities. In August 2025, a parliamentary standing committee on health recommended capping private hospital room rents in metropolitan cities at nearby three-star hotel average tariffs. Cashless services and disputes now account for nearly 20% of Insurance Samadhan’s registered cases, causing tedious approval processes, delayed discharges, and partial claim payouts for healthcare policyholders.