NHA penalises 2,842 hospitals, blocks ₹678 cr bogus claims under Ayushman Bharat

New Delhi: The National Health Authority (NHA) has taken strict action against 2,842 hospitals for fraudulent practices under the government’s flagship public health insurance scheme, imposing a penalty of ₹114.06 crore.

The penal action was taken during the last financial year as part of the National Anti-Fraud Unit’s (NAFU) constant enforcement efforts under the National Health Authority. NAFU identified suspicious insurance claims under Ayushman Bharat and prevented the release of ₹678.47 crore, according to two officials and a document reviewed by Mint.

The authority de-empanelled 2,003 hospitals, suspended 839 facilities, and imposed penalties of ₹114.06 crore on non-compliant providers.

According to the NHA’s annual report for 2025-26, the authority has deployed an auto-adjudication engine (AAE) along with system-generated validation alerts at the pre-authorisation stage to curb misuse. These systems automatically check for mismatches between patient gender and medical packages, detect repeat claims for once-in-a-lifetime procedures, and review all newly issued cards within 24 hours of generation using risk parameters.

“This massive anti-fraud drive is part of an all-inclusive framework aimed at safeguarding public funds. The NHA has operationalized a data-driven ‘Hospital Vulnerability Index Dashboard’ to detect high-risk and potentially fraudulent entities early,” the first of the two officials cited earlier said, both speaking on condition of anonymity.

Further, special safeguards have been deployed for specific treatments – for instance, biometric authentication of patients has been made mandatory at each individual cycle of dialysis packages to mitigate fake claim entries, the official added.

Queries sent to the health ministry spokesperson remained unanswered.

Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (PMJAY) is a flagship central government scheme launched in 2018 that provides a cashless health cover of up to ₹500,000 per family per year for secondary and tertiary hospitalizations to eligible families. The scheme’s nationwide network currently comprises a network of 35,908 hospitals, including 19,472 public and 16,436 private facilities.

Indu Bhushan, former founding chief executive of NHA and a senior associate at Johns Hopkins University, said: “Since its inception in 2018, the NHA has effectively leveraged AI (artificial intelligence) and machine learning for preventing and catching fraud and abuse. Over 100 specialized algorithms are used that are constantly refined through feedback. NHA groups suspicious transactions into distinct buckets—ranging from severe rule violations where payments are immediately withheld, to minor coding errors that trigger warnings. The algorithms look for advanced data patterns and document anomalies.”

“These include ‘impossible’ clinical scenarios—such as a cataract surgery billed for a third eye, hysterectomies for male patients, or a single surgeon performing 15 complex operations a day across different locations. The system also flags unusual volumes of patients originating from the same family or village. NHA is a doing a commendable job in ensuring zero tolerance for fraud, protecting public funds and maintaining the integrity of Ayushman Bharat.”

Dr. Rajeev Jayadevan, public health expert and former president at Indian Medical Association (IMA) Cochin chapter, said that any effort to prevent fraudulent use of the Ayushman Bharat scheme is welcome.

“Public funds are finite, and taxpayers fund a large share of them. Each rupee saved from embezzlement or fraud is a rupee that becomes available for a genuine purpose, especially as it benefits the most economically vulnerable section of the population. Detecting fraud before it occurs, using advanced technology, helps prevent money from changing hands in the first place, reducing the need to initiate recovery of losses later. However, the zero-tolerance policy towards fraudulent claims cuts both ways. It must also assure that overdue payments no longer remain a problem. Many hospitals report unacceptable delays in payment that affect their day-to-day functioning, ultimately forcing eligible patients to seek care elsewhere,” Dr Jayadevan added.

Additionally, the newly launched Health Analytics and AI Unit (HAAU) at the NHA is turning data into actionable insights to track scheme trends and flag anomalies.

The NHA annual report also highlights that the scheme has authorized over 11.93 crore hospital admissions amounting to ₹1.78 trillion since its inception. Over the past financial year, 3.26 crore new Ayushman cards were created, and ₹48,828 crore was spent on treatments.

To maintain standard treatment uniformity, NHA has integrated 675 standard treatment guidelines (STGs) covering 1,671 procedures. Parallelly, hospital quality checks have been tightened under a certification program run with NABH-QCI (National Accreditation Board for Hospitals & Healthcare Providers and Quality Council of India), ensuring that hospitals follow transparent protocols as NHA scales up health assurance across the country.