14K Hospitals, 10K Claim Rejections: Can Star Health Rebuild Trust? 7 Points

Delhi

13,300 Complaints & 15,000 Hospitals: Why Star Health Risks Losing Cashless Services

1. Star Health Faces Hospital Pushback

• Insurer at Risk: Star Health and Allied Insurance.

• Issue: May face suspension of cashless services across AHPI member hospitals.

• Deadline: Hospitals gave Star Health time till 22 September 2025 to resolve disputes.

2. AHPI’s Stance

• Representation: Association of Healthcare Providers, India (AHPI) represents 15,000+ hospitals.

• Key Allegations Against Star Health:

  • Forcing hospitals to accept outdated tariff rates despite rising costs.

  • Pressuring hospitals into lower-than-standard charges.

  • Arbitrary denial of cashless approvals.

  • Unjustified claim deductions/rejections even post-approval.

  • Anti-competitive collective bargaining limiting fair tariff negotiations.

3. Star Health’s Response

• Called AHPI’s suspension threat “arbitrary and unclear.”

• Reassured customers: cashless access will not be impacted.

• Emphasized:

  • Tariff discussions are regular insurer-hospital negotiations.

  • Patient care should not be disrupted by pressure tactics.

  • Long-standing partnerships with 14,000+ hospitals nationwide.

  • Operations under IRDAI’s regulatory framework.

4. Complaints & Regulatory Red Flags

• Insurance Ombudsman (2023-24 Report):

  • Star Health received ~13,300 complaints.

  • >10,000 complaints related to outright claim rejections.

  • Higher complaint volume than combined total of the next 4 largest health insurers.

• Indicates systemic issues in claim management and settlement practices.

5. Wider Industry Context

• Star Health becomes the 4th insurer under AHPI’s radar after:

  • Bajaj Allianz General Insurance (faced temporary suspension).

  • Care Health Insurance.

  • Niva Bupa Health Insurance.

• August 2025: All three were warned of action by AHPI.

• Pattern emerging: insurer–hospital disputes over tariffs & claims handling.

6. Potential Impact on Policyholders

• If unresolved by 22 September 2025:

  • Cashless service suspension likely.

  • Customers may be forced to pay upfront and seek reimbursement later.

  • This would delay settlements and impact affordability of treatment.

7. Financial & Market Implications

• Star Health’s Scale: One of India’s largest standalone health insurers.

• Reputation Risk: Rising complaints + hospital pushback could erode trust.

• Operational Pressure: Loss of cashless tie-ups with 15,000+ hospitals = weakened distribution network.