Tribhuvan University Teaching Hospital (TUTH) in Maharajgunj has suspended its health insurance program for the past five months, citing an inability to implement the new tariff rates proposed by the Health Insurance Board (HIB) since August.
According to the hospital administration, services such as inpatient care and surgeries under the health insurance scheme have been completely halted since August. TUTH had initially introduced the health insurance program in December 2020.
“The Health Insurance Board introduced a revised package system last August, but the rates are not viable for the hospital,” said Acting Director D. Ghanshyam Gurung. “Patients admitted to the hospital have not been able to access services through the insurance scheme.”
Revised tariff sparks issues
The Health Insurance Board began implementing new tariffs under the revised package system on August 17, setting specific rates for various services. For instance, outpatient department (OPD) tickets were priced at Rs 50, general bed charges at Rs 250 per day, and some surgical procedures were capped at Rs 70,000. Additionally, 1,290 types of medicines were included under the insurance scheme.
The board reimburses hospitals based on package rates for surgeries and other services. However, TUTH found the revised rates insufficient to cover expenses, forcing it to suspend the program.
“The package system requires hospitals to absorb additional costs when the reimbursement amount is insufficient,” explained Dr Gurung. “Until the package rates are revised, we cannot resume the health insurance program.”
Thousands deprived of services
TUTH serves hundreds of referred patients daily, but the suspension of the health insurance program has left thousands of insured individuals without access to essential medical services. Currently, only minimal services, such as emergency care and OPD fees, are being provided under the insurance scheme.
Repeated appeals ignored
The hospital administration has repeatedly urged the Health Insurance Board to address the issue, but no resolution has been reached. The board reportedly owes the hospital around Rs 700 million in unpaid claims, further exacerbating the crisis.
“Patients requiring intensive care, ventilator support, or prolonged treatment for complex surgeries incur higher costs than the package rates allow,” Dr Gurung said. “The lack of reimbursement has made it challenging to procure medicines, repair equipment, and pay staff salaries.”
In August, the hospital temporarily resumed services after then-Board Chair Dr Gunraj Lohani and Executive Director Dr Damodar Bista personally intervened and promised a solution. However, Dr Lohani resigned on August 13, 2024 and Dr Bista’s tenure ended on November 10, 2024 leaving the issue unresolved.
Interim leadership and new promises
The Ministry of Health and Population has since appointed Dr Saroj Sharma, the Head of the Quality Assurance and Regulation Division, as Acting Director of the Health Insurance Board. Dr Sharma has pledged to resolve the issue within a week.
“We are committed to resolving TUTH’s concerns promptly. Citizens will soon regain access to health insurance services at the hospital,” Dr Sharma told onlineKhabar.
Unpaid claims and financial strain
TUTH estimates that the Health Insurance Board owes approximately Rs 700 million, including Rs 100 million in rejected claims and NPR 220 million in pending files yet to be reviewed.
“The board is supposed to settle claims within two to three months, but payments for services rendered years ago are still pending,” Dr. Gurung said. “Patients collect three months’ worth of medicines at once, and the hospital has to purchase those medicines upfront. How long can we sustain this program at a loss?”
Despite its challenges, Dr. Gurung emphasized the potential of the health insurance program. “If managed properly, health insurance could greatly benefit the public. However, delays in reimbursement and inadequate package rates undermine its effectiveness,” he added.
Eroding trust in health insurance
The ongoing issues with the health insurance program have reduced public trust. Insured patients face difficulties accessing timely services, endure long waiting lines, and encounter discrimination compared to uninsured patients. Furthermore, insufficient documentation during referrals to larger hospitals has caused additional complications.
According to the Health Insurance Board, 440 health institutions across the country currently implement the health insurance program, with most being government-run facilities.
The board’s inability to address operational challenges, such as ensuring timely reimbursements and revising tariffs, has raised concerns about the program’s long-term viability.
Call for reforms
Dr Gurung urged the government to reform the health insurance system to prevent further setbacks. “If the government fails to address these issues, the program could collapse,” he warned. “Timely reimbursements and realistic package rates are essential for effective program implementation.”
As the hospital and board grapple with unresolved issues, thousands of patients continue to be deprived of vital medical services, highlighting the urgent need for systemic reforms in Nepal’s health insurance framework.
Prime Minister KP Sharma Oli has instructed the Ministry of Health and Population to prepare an action plan for health insurance reforms based on recommendations from the Health Insurance Reform Task Force.
During a briefing at the Prime Minister’s residence in Baluwatar on Sunday, PM Oli emphasised the urgency of implementing reforms to ensure that citizens are not deprived of treatment due to financial constraints. He stressed the importance of educating citizens about health and working towards the goal of a healthier Nepal.
The Prime Minister noted that the task force had provided objective reviews and recommendations for improving the health insurance program and directed the ministry to draft a reform action plan within a week.
Task force findings and recommendations
The briefing was attended by Health and Population Minister Pradip Paudel, Task Force Coordinator Dr Shambhu Acharya, and members Dr Bhagwan Koirala, Dr. Raghuram Kafle, and Member Secretary Dr Saroj Sharma. They highlighted the need for policy, legal, and structural changes in the health insurance program.
The task force report reveals that approximately Rs 11 billion remains unpaid under the program. Currently, 27% of the country’s population is enrolled in the health insurance scheme, with 48% of the enrollees utilizing the services.
The report recommends making the program mandatory for all citizens and providing free healthcare services to those below the absolute poverty line. It also suggests integrating the health insurance scheme with basic healthcare services and other social security fund programs.
The task force submitted its report to the Ministry of Health and Population on December 29, 2024.
