TUTH halts health insurance services citing Rs 400 million in unpaid claims

KATHMANDU: Tribhuvan University Teaching Hospital (TUTH), one of Nepal’s largest public referral hospitals, has decided to discontinue all services under the national health insurance program, citing prolonged non-payment of claims by the Health Insurance Board (HIB).

The hospital administration announced that all treatments provided under the health insurance scheme will be suspended starting Magh 1. The decision follows what the hospital describes as a long-standing financial crisis triggered by unpaid insurance reimbursements.

According to the hospital, the Health Insurance Board currently owes TUTH approximately Rs 400 million in pending payments. Hospital officials say the delay has severely strained its finances, making it increasingly difficult to sustain daily operations.

TUTH stated that it incurs monthly operational expenses of more than Rs 50 million, but only around 50 percent of its insurance claims are approved by the board, further worsening cash flow pressures. The hospital also pointed to a significant mismatch between the treatment rates fixed by the Health Insurance Board and the hospital’s actual service costs.

“Despite repeated requests and formal communications, our concerns have not been addressed,” the hospital said in its public notice. “For the past two years, the hospital has been managing daily expenses through internal resources. Continuing insurance services under these conditions is no longer financially viable.”

Hospital Information Officer Dr Gopal Sedhain confirmed that a substantial portion of claims submitted over multiple fiscal years remains unpaid. He said the lack of reimbursement has begun to disrupt core hospital functions.

“Due to the payment crisis, it has become extremely difficult to manage expenses from internal sources,” Dr Sedhain said. “We have not been able to pay medicine and medical equipment suppliers for the last five months. When it became clear that services could not continue at a loss, we were left with no option but to suspend insurance-based treatment.”

The move by Teaching Hospital highlights deeper systemic issues within Nepal’s health insurance program. According to the Health Insurance Board itself, payments of more than Rs 11 billion are pending to listed health institutions nationwide. Several hospitals have already warned that they may suspend health insurance services within weeks if outstanding dues are not cleared.

Healthcare providers argue that continued delays threaten the sustainability of the entire insurance ecosystem. With hospitals bearing the upfront cost of treatment, delayed reimbursements have pushed many service providers into financial distress.

The suspension at TUTH is expected to directly affect insured citizens, many of whom rely on public hospitals for affordable and specialized care. Policy analysts warn that if the issue is not urgently resolved, insured patients could be systematically excluded from services, effectively undermining the credibility of the national health insurance program.

Under the insurance framework, hospitals provide treatment to insured patients and later submit claims to the Health Insurance Board for reimbursement. However, the board’s ability to make timely payments has been constrained by insufficient government subsidies and budgetary delays.

Officials acknowledge that inadequate funding from the state has limited the board’s capacity to settle claims, creating a growing backlog. Without immediate fiscal intervention and structural reforms, experts warn that more hospitals may follow Teaching Hospital’s path, placing the future of Nepal’s flagship health insurance initiative at serious risk.

The Teaching Hospital decision has intensified pressure on the government and the Health Insurance Board to urgently clear arrears and revise reimbursement mechanisms to prevent further disruption of essential public health services.