Healthcare – Andhra Pradesh clears ₹1,000 crore hospital dues with new payment system

Healthcare – The Andhra Pradesh government has initiated the release of ₹1,000 crore to private hospitals associated with the NTR Vaidya Seva Trust, aiming to address long-pending dues and improve the payment process. A newly introduced mechanism, called the Tri-Party Bill Discounting Agreement, has been put in place to ensure faster and more transparent financial transactions between the state and healthcare providers.

New system designed to speed up payments

Under the revised framework, payments are processed through the AP Power Finance Corporation, a state-owned institution. Funds are released after hospital bills are verified and uploaded through a dedicated online portal developed by the AP Centre for Financial Systems and Services. This system is intended to reduce delays and improve efficiency in handling claims submitted by hospitals.

Officials said that once the verification process is complete, payments are transferred directly into hospital accounts. However, a standard annual interest is deducted before disbursement. The agreement involves three parties—hospital representatives, officials from the finance corporation, and the Trust’s chief executive—ensuring accountability at each stage.

Hospitals begin receiving funds

So far, 323 hospitals have enrolled on the digital platform, marking a steady adoption of the new system. Of these, 25 hospitals have already received a combined ₹62 crore. The state government currently has outstanding dues of ₹2,044 crore payable to 873 private hospitals. From this total, bills worth ₹1,000 crore have now been approved and are in the process of being cleared.

This phased release is expected to ease financial pressure on hospitals that have been awaiting payments for services provided under the government health scheme.

Progress since new administration took charge

According to officials, significant progress has been made in settling past dues since the coalition government assumed office. The Chief Executive Officer of the Trust briefed the Health Minister on the developments, stating that ₹5,556 crore has been paid to hospitals during this period.

This figure includes ₹2,403 crore that was pending from the previous administration. The government has prioritised clearing these backlogs to restore confidence among private healthcare providers participating in the scheme.

Rising healthcare service costs and payments

Between June 2024 and April 2026, hospitals delivered medical services valued at ₹6,900 crore under the scheme. Out of this amount, ₹3,162.68 crore has already been paid to healthcare institutions. The remaining dues are being processed in stages, with the current ₹1,000 crore tranche forming part of a larger settlement effort.

Authorities indicated that while substantial payments have been made, a balance of ₹3,746.68 crore is still pending. This includes the latest approved amount that is currently being disbursed.

Transparency and monitoring through digital platform

One of the key features of the new system is improved transparency. Hospitals can track their payment status online, including details such as approved amounts, deductions, and transaction progress. Officials believe this will reduce disputes and provide clarity to all stakeholders involved.

The digital portal also allows for better monitoring and record-keeping, which could help streamline future claims and payments.

Government reiterates commitment to healthcare support

The state government has reaffirmed its commitment to ensuring uninterrupted healthcare services by clearing pending dues in a systematic manner. By introducing structured financial mechanisms and improving transparency, officials aim to strengthen partnerships with private hospitals that play a crucial role in delivering healthcare services under public schemes.

Authorities have indicated that further payments will continue in phases until all outstanding amounts are settled, ensuring that hospitals can operate without financial strain while serving patients across the state