Bengaluru. The contribution that government health schemes make to the revenues at India’s largest private hospital chains has declined. This may indicate that private healthcare providers are reevaluating their involvement. Experts believe that payment delays, low reimbursements, and price restrictions may have contributed to the squeeze on profitability. Max Healthcare, Narayana Health and Fortis Healthcare are among the hospital chains that have reported revenue impacts and highlighted challenges with managing government health schemes. Data from the business advisory firm PraxisGlobal Alliance shows that, on average, state-backed healthcare schemes like the Central Government Health Scheme, Ex-Servicemen Contributory Health Scheme, and Central Government Health Scheme, account for 25% of revenues at top private hospitals. Praxis Global Alliance said to ET that government schemes’ revenue share could fall by 3-5 percent in the first quarter FY27, due to de-empanelment of selected employees or bed cs.

CGHS provides coverage for central government workers and pensioners while ECHS offers protection to defence personnel, their families and dependents. Both have set rates for private hospitals that are accredited and both have played a central role in the current dispute.

While the signs of unhpiness have been evident since 2020, the voices from the industry have only become louder over the past year. ollo Hospitals is not directly talking about government schemes because they are a very small part of the business. In the third fiscal quarter of FY26 83% of revenue from inpatients came from cash and insurance patients, according to its management. All other categories including government schemes are a smaller portion of the remaining 17%. A query sent via email to

ollo Hospitals was not answered until the time of publication. Experts believe that there are two pressures: low reimbursement rates and slow payment. Akhil Puligadda is a Praxis Global Alliance practice member in healthcare and life science. He said that hospitals were trying to switch their payer mix to payers who have shorter payment periods. This would help them maintain a healthier working cital. Max Healthcare

‘s losses have been quantified. On its Q3 results call, it estimated a Rs. 200-crore impact on revenue from joining CGHS. It must provide a 30% discount for chemothery drugs under its memorandum.

“We discontinued the supply of drugs when the margin was below 30%. In cases where the margin exceeds 30%, we continue to supply but with lower revenues,” said Yogesh Sareen, chief financial officer, in an earnings conference call. Yogesh Sareen estimated that the current hit was Rs 140 crore, after taking into account GST and oncology effects. Abhay Soi, Chairman of

, said: “What they asked was to sell below the purchase cost. Everyone has stopped using it.

A deliberate backwards move Narayana Health took a conscious decision in December to limit scheme volumes for hospitals in the northern region. This was due to late payments and drug coverage cs. The company stated that “this resulted into a conscious decision to control the volume of schemes”. HealthCare Global was under different pressures. The transition of the Odisha State Scheme pushed down average revenue per patient by 3% in its eastern cluster. A dispute in Andhra Pradesh over a state-sponsored scheme led to a strike of nearly 25 days in Vizag. This caused a disruption in volume for several months due to the long cancer treatment cycles. Manish Mattoo, the chief executive officer of , said that “the impact is manageable and structurally insignificant”. Fortis Healthcare has seen positive results with CGHS after rate revisions, but the hospital network said confusion about drug pricing remains under ECHS. Experts in healthcare say hospital chains rely on high-value treatment and private patients for revenue growth. Madhur Singhal is the managing partner of Praxis Global Alliance. He said that on the financing side some hospitals pledge government receivables for short-term loans from non-banking finance companies (NBFC). Max Healthcare says that the longer-term solution lies in revised rates.

Published on May 7, 2026, at 8:06 AM (IST)

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