Varanasi’s Banaras Hindu University (BHU) hospital has temporarily suspended or scaled back treatment under the central government’s flagship Ayushman Bharat–Pradhan Mantri Jan Arogya Yojana (PM-JAY) for patients from Bihar amid disputes over delayed reimbursements and administrative coordination.

The interruption, first reported in early February, has left many low-income families unable to access cashless hospital care for serious illnesses such as cancer, cardiac disorders and other chronic conditions.

Hospital administrators have attributed the disruption to months of pending dues and financial stress, while Bihar health officials say talks are underway to address the issue.

BHU Hospital, one of North India’s largest public referral centres, often treats patients from eastern Uttar Pradesh and neighbouring Bihar, where access to specialised services is limited.

For families reliant on PM-JAY – which guarantees up to ₹5 lakh of free hospital care per household annually – the service disruption has been a brutal shock, forcing patients either to postpone treatment or pay out of pocket in private facilities.

The hospital continues to provide routine services for non-Ayushman patients, but new admissions under the scheme have been restricted, according to officials.

A senior administrator at BHU explained that “outstanding payments running into crores of rupees” have made it difficult to sustain cashless treatments without timely settlement from the National Health Authority (NHA) and state agencies.

Pending reconciliations and paperwork have hampered the hospital’s ability to process claims, leading to a temporary pause on offering services under PM-JAY for Bihar residents.

Bihar’s health department, for its part, has acknowledged the difficulties and assured that steps are being taken with competent authorities to restore services “as swiftly as possible”.

Patients Stranded, Officials Under Pressure

For many patients, the disruption could not have come at a worse time. Across rural and marginalised communities in Bihar, Ayushman Bharat has become a healthcare lifeline, saving beneficiaries lakhs in treatment costs that would otherwise push families into debt.

Official state data suggests that millions of individuals in Bihar have enrolled under PM-JAY including recent government efforts that extended eligibility to all ration-card holders making Bihar one of the country’s most populous user bases of the scheme.

Healthcare advocates warn that administrative friction between states and empanelled hospitals often disproportionately harms the poorest patients, who cannot afford private alternatives.

In neighbouring regions, authorities have also cracked down on hospitals found charging Ayushman beneficiaries despite entitlements to free care but systemic issues such as reimbursement delays and bureaucratic hurdles persist across the sector.

At BHU, the disruption compounds other pressures: resident doctor strikes in recent years have previously impacted services, and patients have taken to social media to describe long waits and operational challenges at government facilities. While these accounts cannot be independently verified, they reflect broader frustrations with public health infrastructure across the region.

Hospital management insists that emergency care and critical monitoring continue for previously admitted patients, but new treatment authorisations under PM-JAY are currently on hold pending resolution of outstanding payment claims.

Bihar’s health officials have said they are in dialogue with both the National Health Authority and BHU administrators to ensure “smooth continuance” of services, though no specific timeline has been provided.

A Broader Healthcare Strain

The BHU incident is part of a wider pattern of stress under India’s public health insurance architecture, where delayed reimbursements and administrative friction have periodically led hospitals – especially private providers – to opt out or temporarily suspend services under Ayushman Bharat.

Nationally, hundreds of private hospitals have reportedly left the scheme citing low reimbursement rates and slow payments, prompting concerns about long-term viability and access for marginalised patients.

In some states, hospitals have staged protests or suspended services when claims remained unsettled for months, underscoring the financial strain on healthcare providers who are expected to deliver high-cost care without prompt compensation.

Similar complaints have surfaced nationwide, with patients occasionally denied cashless treatment where hospitals cite unpaid dues from government agencies.

Ayushman Bharat’s overall impact remains significant – official figures suggest that the scheme has saved beneficiaries substantial sums and helped secure care for millions.

But the persistent operational challenges highlight the fragile balance between policy promise and on-the-ground delivery, especially in states with stretched public health resources.

Policy Gaps, Patient Costs and Accountability

Experts and activists have repeatedly called for greater transparency, faster claims settlement and stricter monitoring to ensure that eligible patients are not denied care due to administrative inertia.

Pending payments not only disrupt service delivery but also erode trust in public welfare schemes designed to reduce catastrophic health expenditures for poor families.

The dispute at BHU has also reignited debate over the effectiveness of state-centre coordination in health governance. PM-JAY’s portability provision theoretically allows beneficiaries to receive cashless care across India, but implementation remains uneven when inter-institutional reconciliation lags.

Healthcare economists argue that streamlining digital claim systems and introducing automatic reconciliation mechanisms could reduce friction and prevent future service interruptions.

Strengthening grievance redressal platforms, ensuring real-time payments and mandating penalty timelines for delayed settlements are among measures being discussed in policy circles.

The Logical Indian’s Perspective

The right to healthcare is foundational, not a privilege earned through bureaucratic endurance. When public welfare schemes like Ayushman Bharat falter due to administrative logjams or delayed reimbursements, it is the most vulnerable who stand to lose the most.

The BHU disruption – and similar episodes elsewhere – exposes a critical gap between policy design and delivery, underscoring the need for accountability, fiscal discipline and a citizen-centred implementation ethos.

Governments and health authorities must transcend departmental silos and ensure that fiscal processes do not dictate whether a poor patient lives or suffers.

Secure reimbursement mechanisms, transparent data flows, and real-time support for empanelled hospitals can ensure that the promise of universal health coverage becomes reality for all Indians.