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A Closer Look at CGHS

Copyright: 2024 | Sameer A. Khan | All rights reserved.

Central Government Health Scheme (CGHS) is an Enterprise, a Program, and an Entity, that is owned and operated by the Government of India's Directorate of CGHS, under the Ministry of Health and Family Welfare.

Throughout India, CGHS Empanelled Hospitals are the "within-network" providers of healthcare products and services on credit, to qualified Consumers, via CGHS.


The Directorate of CGHS is a Health Insurance company, and not only a Guarantor or a Surety1 of credit, because the said Directorate that belongs to the Government of India:

  1. sets and publishes the price of healthcare products and services at "CGHS rates" for the amount of credit a healthcare organization (i.e. a CGHS Empanelled Hospital) can give to an eventual Consumer (i.e. the Principal Debtor),

  2. decides through which retail channel and commercial partner, each "selectively qualified" Consumer in India can receive healthcare insurance credit, from its retail channel and commercial partners called, CGHS Empanelled Hospitals,

  3. provides healthcare insurance coverage to Indian Citizens via its selected CGHS Empanelled Hospitals, but without a properly defined insurance policy of the coverage for each individual Consumer.

The Directorate of CGHS is neither registered as a Health Insurance Entity with the Insurance Regulatory and Development Authority of India (IRDAI), nor is it regulated as an insurance coverage provider, though it provides health insurance coverage to employees and retirees of Central Government Employers, and not only credit guarantee via its CGHS Empanelled Hospitals. Also, all Indian Citizens who avail CGHS are unfairly and unjustly prohibited from utilizing any other health insurance coverage by their Central Government Employers and the Directorate of CGHS.


Now:

  1. Directorate of CGHS may claim that they provide "healthcare subsidy" to Consumers via selected healthcare organizations in India called CGHS Empanelled Hospitals, and not "healthcare insurance credit" to anyone. However, the process of submitting and awaiting for Medical Reimbursement Claims (MRCs) to be settled by a Consumer's Central Government Employer, via the CGHS, undoubtedly and indisputably causes financial credit to be issued to Consumers from the Reserve Bank of India's accounts for CGHS, for handling time-sensitive and market based risks in that process.

  2. In the more specific case of dozens of Central Universities in India, innocent Consumers as members of those Universities are unfairly prevented and prohibited by University Administrators, from getting a genuine CGHS ID Card. The plastic CGHS ID Card is practically a Credit Card, issued from the Directorate of CGHS for the disbursal of credit to Consumers and for digital clearance of MRCs. Those Consumers as ordinary Citizens are also unjustly compelled to take on the added burden of handling monthly and yearly cash-flow risks, on behalf of their Employer, while their University as a Central Government Employer clears their manually submitted MRC Records when they don't have a CGHS Card. Those manually submitted MRCs to Central Universities are cleared using the unofficial versions of CGHS known as "Cash Advance" programs via the coffers of the University Grants Commission (UGC).

  3. Given that a "CGHS Card" happens to be a financial instrument, issued by the Directorate of CGHS to selectively qualified Consumers, for the purposes of using that Card to obtain and consume, purchased products and services on credit, the Directorate of CGHS is also an unregulated Credit Card company.

  4. So, what exactly does a healthcare organization gain from becoming a member of CGHS Empanelled Hospitals by joining either the actual CGHS, using a firmly and legally binding contract with the Government of India that is euphemistically labeled as a Memorandum of Understanding (MoU)? Does it incur loss of sales margin on post-paid products and services? No, those healthcare providers do not incur any losses on the healthcare products and services sold to Consumers via CGHS. The healthcare organizations selected by GoI as members of CGHS, gain Customers with good or excellent credit scores, who are exclusively referred to those selected healthcare organizations from Central Government Employers. Those Customers i.e. Consumers, with good or excellent credit scores, practically never default on their medical bills, pay in cash, and are soft targets for being price gouged or extorted by certain nefarious healthcare providers. Also, the total amount on the "Final Sales Bill" for any rendered healthcare products and services based on CGHS rates, is any ways jacked up by many of the empanelled healthcare providers, using a variety of marketing tricks, hidden costs, and surcharges.

  5. When CGHS Empanelled Hospitals show their yearly Financial Balance Sheets along with Profit and Loss Statements to tax-collection agencies, do those healthcare organizations recuperate the so-called Consumer subsidy for each business transaction that utilized CGHS rates, via tax vouchers? My current knowledge indicates that they do not get tax-breaks or rebates, but please do correct me if I'm wrong on this or any other mentioned note points (by submitting a GitHub Issue or a Pull-Request for this article). However, and more importantly, there hasn't been any straightforward method to tally sales bills having business transactions for CGHS rates, against MRC Records, especially when those post-paid "cash bills" from most hospitals and clinics, have never been legitimate invoices to Customers to begin with.

  6. There are many reasons why several corporate hospitals in India, till date, have stayed away from joining CGHS as an Empanelled Hospital. One is mainly because, the benefit to mature and honest corporate hospitals is nil or negligible, particularly when the demand for healthcare goods and services in India is so great that, proper hospitals and clinics don't need to be a part of any "referral program." This statement must not be viewed as being defamatory or derogatory to nascent healthcare organizations that may seek to benefit from acquiring Customers with good and excellent credit scores via CGHS.

  7. Citizens who are members of Central Government Entities do need a proper healthcare insurance plan, especially one that does not prohibit them from purchasing a more competitive healthcare insurance coverage policy from the open market. The manner in which the Directorate of CGHS and the Central Government Employers prohibit Consumers who make use of CGHS, from having a regularized health insurance plan, is plainly illegal, because it infringes upon the Consumer Rights of Indian Citizens, and also because it happens to be an "anti-competition tactic" used against other healthcare insurance providers in the open market. That tactic of forcibly preventing millions of Central Government employees and retirees from purchasing a regularized healthcare insurance policy from the open markets, causes an appreciable adverse effect on competition within India's insurance industry, due to an abuse of the Indian Central Government's dominant position in that market via its "Directorates."

    1. It is most certainly wrongful and illegal for the government regulators of health insurance companies in India, to also have been clandestine insurance providers to captive Consumers through unregulated government bodies, while using anti-competition tactics against more heavily regulated private insurance companies. The improperly implemented system called CGHS with its anti-competition tactics and corruptions has resulted in millions of Euros worth of Rupees as loss to Indian citizens and tax-payers each year, and this has been ongoing for decades.

  8. These issues and problems pertaining to CGHS also impact families of employees and retirees of the Central Government's Armed Forces, when they go to a private hospital for any reason. Armed Forces personnel and staff members along with their dependents, as healthcare Consumers, utilize a program similar to CGHS at military hospitals, but they may also need to visit privately operated specialty clinics and hospitals on various occasions, for a variety of reasons. This was particularly true, during the Covid Pandemic years. Those Armed Forces members typically do not use CGHS, however there is no reason why they and their dependents wouldn't qualify for being allowed to utilize healthcare treatments at CGHS costs in CGHS Empanelled Hospitals.


The fact of the matter is that the eventual Consumer who trusts and invests faith in CGHS for receiving health insurance credit from healthcare providers known as CGHS Empanelled Hospitals, has to suffer in numerous ways because of systemic faults and errors, for which, certain identifiable individuals belonging to above-mentioned Directorates and Ministries of the Central Government are responsible.



Footnotes

  1. Meaning of the concepts of Surety, Principal Debtor, and Creditor which are applicable to CGHS, are defined as per law in Section 126 of Indian Contracts Act 1872. ↩