As a doctor, you want to help people. Understanding India's government health schemes can help you serve patients who need it most. But this decision has a massive impact on your practice’s cash flow and long-term success.
Ayushman Bharat is the biggest national insurance scheme, and one wrought with countless difficulties. Navigating it successfully has potential benefits and drawbacks for any healthcare provider.
If you are a doctor, hospital owner, or clinic manager in India unfamiliar with Ayushman Bharat and its many nuances, this article is for you. It is meant to give a simple, concise, & practical summary from start to end.
What Is Ayushman Bharat PM-JAY?
Cashless health coverage of ₹500,000 for 10.74 crore (107 million) households on a family floater basis. These families, amounting to 55 crore (550 million) individuals, belonged to the bottom 40% of the Socio-Economic Caste Consensus (SECC) of 2011.
Coverage for 1,929 procedures + all treatment costs. Includes pre-hospitalisation expenses for up to 3 days & post-hospitalization expenses for up to 15 days.
In September 2024, the GOI expanded the scheme to include all 70+ senior citizens, regardless of their background, with additional coverage of ₹500,000. That’s another six crore (60 million) seniors the scheme now serves.
How PM-JAY Works:
The backbone of this scheme is a massive network of around 28,000 “empaneled” public & private hospitals. Together, they work toward achieving universal health coverage. Every state has its own State Health Agency (SHA) in charge of the scheme’s implementation. They follow one of three models for logistics:
Trust Model: SHA directly manages everything from claims to payments.
Insurance Model: The SHA contacts one or more insurance companies to manage the logistics.
Hybrid Model: Combines both in some capacity. SHA manages certain aspects, while insurance companies handle the rest.
That’s the behind-the-scenes of how the scheme operates. Here is what you need to know as a healthcare provider.
1. Empanelment via HEM:
To accept patients under PM-JAY, private healthcare providers must get empaneled through the Hospital Empanelment Module (HEM). The process is designed to be simple:
Visit https://www.pmjay.gov.in/> Menu (Top-Left Corner) > HEM.
Fill in the details, which are approved by the District Empanelment Committee (DEC) within 15 days, pass the physical inspection, and final approval from the State Empanelment Committee (SEC).
Minimum requirements might include 10 inpatient beds with ample spacing and quality accreditations, depending on hospital type. (P.S. our PM-JAY: Empanelment Guide)
Post-empanelment, HEM is also used to update hospital information, learn about new policy developments, view procedure package prices, and ensure compliance with all PM-JAY policies.
Caution: There have been reports of bribery & corruption to fast-track the process. Empaneled hospitals are also subject to monitoring and disciplinary proceedings. Keep that in mind as you make plans for your practice.
2. Verification via BIS:
Once empaneled, the hospital can start treating beneficiaries (citizens benefitting from the scheme) & get reimbursed under PM-JAY. To do this:
Once admitted, the hospital must verify the patient’s eligibility through the Beneficiary Identification System (BIS). It does so by matching the SECC database.
Staff can input patients' details, such as mobile number, name, age, gender, and Aadhaar number, or they can verify them via BIS with the PM-JAY card.
Note: In the future, the GOI might integrate the Ayushman Bharat Digital Mission (ABDM) with its insurance framework. This might provide the patient’s medical history on BIS.
3. Pre-Verification & Managing Claims via TMS:
Then comes the most critical part of the process: documentation and managing claims. It’s done via PM-JAY’s Transaction Management System (TMS). How it works:
A Pre-Authorisation Request (PAR) must be placed for the specific treatment package* in the TMS. The official Turn-Around Time (TAT) for this is just 6-12 hours.
This request includes documents like the doctor’s notes & test results. These serve as evidence for the treatment’s necessity.
Once the PAR is approved, the treatment is administered. After the patient is discharged, all final documents are uploaded & the claim is submitted for final adjudication & payment. The whole process happens through TMS.
The official TAT for the final claim is just 15 days for in-state & 30 days for patients treated outside their home state.
*The GOI has taken a highly controversial measure to streamline the claims process and standardize the procedures covered under PM-JAY. They’ve done this by negotiating fixed rates for each treatment into “treatment packages.”
Should Your Hospital or Clinic Join PM-JAY?
If you wish to empanel under PM-JAY, it’s vital to know the grave risks and potential opportunities associated with the scheme’s implementation. Here is a simple breakdown:
Pros
The govt. benefits from private infrastructure, while private hospitals can tap into a new market.
Improves the country’s overall quality of life by giving at least some protection to the most vulnerable.
Hospitals can fill their beds and improve occupancy, which can lead to improved long-term revenue. They can leverage economies of scale.
Massive potential to immeasurably grow your hospital’s goodwill, long-term reputation, and positive impact.
Cons
Crippling cash flow disruptions due to systematic delays. According to an audit of the 2018-21 period:
Pre-authorization usually took longer than the 12 hours, delaying treatment.
40.23 lakh claims worth ₹6,052.47 crore were still under process, awaiting approval or rejection.
Precise documentation and administrative work. It is recommended to keep dedicated staff familiar with the HEM, BIS, & TMS to avoid mistakes.
Fixed, pre-defined, often lower package rates for procedures (40-50% less than market rates, in some cases).
Being forced to “cherry-pick” viable procedures to make ends meet.
Ex. A chronic disease treatment might cost more resources than the scheme compensates for.
Meanwhile, a complex cardiovascular surgery might cost less than the fixed rate, making it more profitable.
Key Considerations for PM-JAY Participation
It’s important to note that even large, well-established hospitals have said that they make “no discernible profits” from PM-JAY patients and participate primarily to support the needy.
This does not mean that Ayushman Bharat is a total failure or that treating its beneficiaries is a total loss. Hospitals can earn profits by increasing the volume of treatments. But participation does carry significant risks. Here is our recommendation to balance the two (read our full article on PM-JAY: Best Practices for more):
Do thorough local research. Reach out to medical associations, look at your state’s PM-JAY data, and even reach out to empaneled hospitals for a feasibility study.
Prepare for delays without normalising them. Stress-test your financial models for liquidity on 6, 9, & 12-month cycles. Know your threshold for delays according to your required cash flow.
Dedicate a staff member to specialise in the PM-JAY process. Ensure pristine documentation, systems, and policy compliance to minimize delays and claim rejections.
Conclusion
While Ayushman Bharat has weathered a hurricane of justified criticism and still struggles with massive challenges, hope still lives on. Being one of the most ambitious schemes of its kind, failures and roadblocks are to be expected.
The question for doctors and hospital management is not “Will the scheme work?” but “How can we make it work?” Of course, the implementation has to be financially viable for real, sustainable improvement.
Ultimately, it’s up to the growing corporate medical sector and all its members to hold the administration accountable and lobby for systemic improvements. Read our article on PM-JAY: All You Need to Know for more details.
FAQs
Q1:Who can be empaneled under Ayushman Bharat PM-JAY?
A: Private hospitals, clinics, and single-speciality centers meeting HEM criteria can apply. Government hospitals are automatically included.
Q2:How long does empanelment take?
A: Officially, 15 days at the district level + state approval. Realistically, delays can occur due to inspections, documentation, or other issues.
Q3:What is the Turn-Around Time for claims?
A: Officially, Beneficiary Verification: instant. Pre-authorization: 6–12 hours. Final claim approval: 15 days in-state, 30 days out-of-state. In practice, delays have been reported at various places. Conduct thorough local research to gain a better understanding.
Q4:Is participation profitable for hospitals?
A: It depends. High volumes and efficient management can make it viable, but cashflow delays and low package rates often pose risks.
Q5:Can hospitals update their procedures or policies after empanelment?
A: Yes, via the HEM portal. Updates must comply with PM-JAY policies to maintain empanelment.
