OBJECTIVES: The Government of India introduced Ayushman Bharat- Pradhan Mantri Jan Aarogya Yojana (AB-PMJAY), publicly financed health insurance (PFHI) scheme for provision of inpatient care services for about 500 million population. The objective of the study is to cost estimates of health benefit packages (HBPs) covered under the AB-PMJAY scheme. The cost estimates are used as base for the revision reimbursement prices by the National Health authority (NHA).

METHODS: The CHSI study included eight specialities contributing to approximately 66% of the total HBPs. A multi-stage stratified sampling method is used to select thirteen states based on geography, human development index (HDI), gross state domestic product (GSDP) and health workforce density. A mixed (top-down and bottom-up) micro-costing methodology was used for data collection. An economic perspective for costing was employed.

RESULTS: Cost estimates for HBPs were calculated in four scenarios i.e. mean cost and at different levels of fixed cost (75%, 50% & 33%) and 100% recurrent cost. NHA considered the estimates at 50% fixed and 100% recurrent cost as base estimates to derive the reimbursement prices for HBPs. As per PMJAY 2018, 41% of the HBPs were under-priced by 50% or more compared to the cost estimates. However, after the revision in 2019, under-priced HBPs reduced to 18%. Similarly, HBPs within range of plus-minus 10% of cost estimates increased from 14% to 16%.

CONCLUSION: Price setting is a complex process having wide financial implications. At the one hand, prices should be reasonably acceptable to the providers and also boost overall empanelment of hospitals. At the other hand, prices should be within budgetary caps of the government/payee. In India scenario, due to the lack of health system cost data the process of price setting becomes more challenging. Hence, the cost estimates derived using standard methodology provided NHA a robust basis for negotiate/revision of reimbursement prices.