Big relief for central government employees and pensioners. After increasing the Dearness Allowance (DA), the Centre has now rolled out major reforms under the Central Government Health Scheme (CGHS). A notification issued on October 3 revises rates for nearly 2,000 medical procedures — the biggest update in 15 years. The new rates take effect from October 13, 2025, promising fairer pricing for both hospitals and patients.
For years, CGHS beneficiaries have complained that empanelled hospitals refuse cashless treatment, forcing them to pay huge bills upfront and wait months for reimbursement. Hospitals say the old package rates were too low and payments were often delayed — making it difficult to sustain services.
In August 2025, the Confederation of Central Government Employees (GENC) petitioned the government to resolve the issue, saying employees and pensioners faced financial hardship and denial of treatment during emergencies. Now, new package rates have been approved for 2,000 procedures, adjusted by city tier (Tier I, II, III) and hospital accreditation level.
Under the new structure, Tier-II city rates are 19% lower than base rates, and Tier-III city rates are 20% lower. NABH-accredited hospitals will follow the base rate, while non-accredited ones will get 15% lower rates. Super-specialty hospitals with more than 200 beds will be entitled to 15% higher rates.
Cashless treatment will now be easier. Hospitals can adopt the revised rates and provide services without asking for advance payments. This will reduce the burden of out-of-pocket expenses and long waits for reimbursements, ensuring smoother and faster access to healthcare for employees.
Healthcare associations have welcomed the reform, calling it a long-overdue step towards strengthening India’s public health system. Experts say it will rebuild trust between CGHS beneficiaries and hospitals while improving access to quality medical care.
While minor revisions were made in 2023 for ICU and consultation fees, and again in 2024 for neuro implants and select surgeries, this is the first comprehensive overhaul of CGHS rates in more than a decade.
CGHS serves as a vital safety net for millions of government employees and their families. With the new rates coming into effect, hospitals are expected to provide better services, timely payments are likely to improve, and faith in the public healthcare system could be restored.
