Insurance Company for AB-PMJAY terminates its contract with J&K govt

Insurance Company for AB-PMJAY terminates its contract with J&K govt

Patients availing the ambitious PM-JAY scheme which provides free treatment upto Rs 5 lakh at empanelled hospitals have been pushed into a quandary as the IFFCO–TOKIO General Insurance Company has terminated its contract with State Health Agency of Jammu and Kashmir government a year before its three year term ends, but State Health Agency has maintained that the end of the contract will not affect healthcare, reports ETV Bharat’s Mir Farhat.

Srinagar (Jammu and Kashmir): Patients in Jammu and Kashmir availing government’s health insurance under Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) are likely to bear the brunt as the IFFCO–TOKIO General Insurance Company has terminated its contract with State Health Agency of Jammu and Kashmir government a year before its three year term ends, sources said on Thursday.

However, SHA officials claim that termination will not affect the healthcare of patients or payments to impaneled hospitals. The company has even got relief from the High Court which dismissed the petition filed by the SHA against the insurance company for terminating the contract. The termination of the contract will have monetary implications for patients who avail the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY), commonly known as Golden card scheme.

It will also impact the 239 hospitals impaneled with SHA for providing free services. The contract between SHA and IFFCO-TOKIO General Insurance Company Limited was executed for three years starting from 10th of March, 2022 and would have ended on 14th March, 2025. But, the company terminated its contract in only two years and conveyed to the SHA last year in November that they are not interested in further renewing the contract, notwithstanding requests from SHA.

The SHA sought relief from Jammu and Kashmir High Court and filed a petition seeking directions for continuation of the contract. However, the bench of Justice Wasim Sadiq Nargal on February 2 dismissed the SHA’s petition saying the petition filed by the SHA under Section 9 of the Arbitration and Conciliation Act, 1996 is held to be without any merit.

The empaneled private hospitals and healthcare centers say they have been left in lurch as SHA has not yet gone for new tendering for new insurance companies even as IFFCO-TOKIO terminated its contract in November last year. They said that if SHA goes for tendering in this month, it will take up to May to complete the exercise.

As per guidelines, it takes minimum three months for a new insurance company to establish their offices and commence the work if the SHA starts tendering process in this week and the same tenders are accepted by the Finance Department without going for re-tendering. “The empanelled hospitals will face consequences due to delay in processing of claims and then payments,” said a hospital manager.
He said that if the government runs the scheme in trust mode it will be a failure as across India Ayushman in trust mode is a failure including in Karnataka. Chief Executive Office SHA, JK, Sanjiv Gadkar told ETV Bharat that the termination of the contract “will not have any negative impact on patient care or payment to the empanelled hospitals”.

“SHA has still time and we will take an appropriate decision to ensure that the scheme is not interrupted or effected. The time limit for payments to empanelled hospitals is 15 days after making the claims. We have got ample time to make payments; that is not an issue at all,” the CEO said. He said that whether the JK government will go for re-tendering to hire new insurance company or create its own trust to run the scheme, it will be decision of the government.

Leave a Comment