Bajaj Allianz General Insurance has assured policyholders that it will directly settle hospitalisation bills in cases where cashless services are denied, as talks continue with hospitals to resolve a dispute raised by the Association of Healthcare Providers India (AHPI).
According to The Economic Times, AHPI recently announced plans to suspend cashless hospitalisation services for Bajaj Allianz customers starting September 1, citing disagreements over reimbursement practices. In response, Bajaj Allianz stated that even if hospitals deny cashless claims, the insurer will transfer payments directly to customers’ accounts before they are required to settle hospital bills.
Tapan Singhel, Managing Director and CEO of Bajaj Allianz, noted that the company has not received reports of cashless claim denials so far. However, he emphasised that the insurer would protect policyholders from financial stress in such cases, adding that the company’s direct settlement model – currently in place for motor insurance claims – would be adapted for health insurance policies as well.
The insurer is the fifth-largest player in India’s health insurance market, with premiums of ₹2,202 crore collected in FY26 up to July, and has tie-ups with around 25,000 hospitals. The company expressed confidence that the matter would be resolved soon, pointing to similar disputes between hospitals and other insurers that were recently settled.
Meanwhile, the General Insurance Council (GIC), the industry’s representative body, criticised AHPI’s suspension notice, stating it created unnecessary confusion among policyholders. The council warned that such disruptions could directly impact families forced to make upfront payments for treatment and could jeopardise patients’ survival in critical medical cases requiring immediate intervention.
The standoff highlights the ongoing tensions between insurers and private hospitals over reimbursement models, even as insurers seek to expand coverage and consumers increasingly rely on cashless access for health services. Industry observers note that how this dispute is resolved may set an important precedent for future negotiations between providers and insurers, particularly at a time when health insurance penetration is steadily rising in India.
