The government will create an escrow account for payments under AB-PMJAY | Latest India News
The Union Health Ministry is planning to set up an escrow account to help quickly settle payments under the Ayushman Bharat health insurance scheme, people with knowledge of the matter have said, explaining how the plan will maintain funds paid to hospitals even if central or state government departments, which share the costs, delay in releasing the money.
Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) AB-PMJAY is a centrally sponsored program offering ₹5 lakh as insurance cover for hospitalization of poor and vulnerable families. The premium contribution ratio between the Center and the state governments is 60:40 in all states except the Northeast and the three Himalayan states, where the ratio is 90:10.
One of the officials said the move was to ensure a more stable corpus. “This decision is being considered as a measure to attract more hospitals to Ayushman Bharat-PMJAY,” a government official with knowledge of the matter said, speaking on condition of anonymity. “There have been complaints of late payments, which could be because state governments are sometimes slow to release their share of the money.”
An escrow account is where funds are held in trust while two or more parties complete a transaction.
According to the proposal, a designated bank will make timely payments through the escrow account, even if there is a delay in the money provided by the central government or state governments. The bank could then charge interest on the specified amount to the defaulter, the person said.
In the case of the Union Territories, the central premium contribution is 100% for UTs without a legislature, while the ratio is 60/40 for those with a legislature. The central government is already providing financial support to states that need additional resources to implement the program. The annual premium is approximately ₹1200-1300.
The National Health Authority, the nodal authority responsible for implementing the flagship health insurance scheme, has also been considering ways to make it a more attractive proposition for hospitals.
Among other things, a green channel for hospitals constituted with a defect-free file is offered, allowing to instantly reimburse 50% of the amount of treatment to these hospitals.
It could take at least two weeks to reimburse the cost of treatment to a hospital under the program.
Nearly 28,000 hospitals have now been established under the scheme where any of the beneficiaries of Ayushman Bharat can avail free medical treatment.
Bottlenecks such as late payments need to be addressed in programs of this magnitude, public health experts have said.
“It will be a big plus for the hospitals if the money is reimbursed on time as this is normally one of the major disputes,” said Dr MC Misra, former director of the Indian Institute of Medical Sciences, Delhi.
The National Health Authority has created at least 1,600 packages for specialist and super specialist treatments. These treatment packages are revised regularly to reflect current demands and also the rising cost of providing healthcare, so that hospitals do not face a monetary crisis.
Last year, the authority revised beneficiary packages of around 400 procedures under the scheme to also include surgical treatment for mucormycosis which increased in number after the second Covid-19 surge.
In the new health benefits package, the prices of some packages have been increased by 20% to 40% to meet market standards. The central government is also expanding the scope of beneficiaries and recently announced the addition of members of the transgender community as beneficiaries, and packages have been drafted considering their needs such as gender reassignment surgery.