Why AYUSH claims keep getting rejected despite new insurance rules

Mint

6 hours ago

Chhattisgarh-based Moin Vanak, who suffered from diabetes, hypertension, and poor digestion, turned to naturopathy for relief from persistent shoulder, knee and calf pain—as well as sleep issues. He got admitted for a 10-day in-patient treatment at a NABH-accredited facility, paying the expenses out-of-pocket despite having insurance, and later applied for reimbursement.
Despite holding a valid policy, his claim was rejected. The insurance company said, "as per submitted documents, the patient was admitted primarily for diagnostic and evaluation purposes."
Vanak has submitted his doctor's justification for why in-patient (IPD) care was essential, but the claim remains under dispute. "They are doing so even as the hospital is NABH-accredited," he said.
As per the Insurance Regulatory and Development Authority of India (Irdai) directive issued in January 2024, all health insurance policies must cover AYUSH—Ayurveda, Yoga and Naturopathy, Unani, Siddha, and Homeopathy—treatments on par with modern medicine. While earlier policies included exclusions and sub-limits, insurers are now required to remove these.
Yet, some exclusions remain. For instance, Star Health's comprehensive policy still excludes yoga and naturopathy. Niva Bupa's Reassure 2.0 plan also excludes yoga.
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Steep rejection rates
Despite growing interest, many claims get rejected.
'We have spoken to a couple of AYUSH hospitals whose administration told us at least 70% insurance claims get rejected," said Shilpa Arora, co-founder & COO, Insurance Samadhan.
Mumbai-based CA Mayank Gosar faced a similar situation. His parents, suffering from diabetes and digestive disorders, took a 7–8 day treatment at a NABH-accredited centre.
'There was substantial improvement in health post the treatment. They had taken panchakarma and detoxification therapies, full body acupressure, abdomen pack, neck pack, hydrotherapy and various other ayurvedic procedures," said Gosar.
Gosar's mother's claim was rejected on grounds that the treatment didn't need hospitalisation.
'The doctor had clearly mentioned in the justification letter that staying in the AYUSH hospital for 7-8 days was medically necessary," he said. In his father's case, insurers kept asking for the same documents and have not processed the claim for over a year.
Gosar has now approached the Insurance Ombudsman.
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Faridabad-based Bhairav Vashishth's claim, initially rejected, was eventually accepted for cashless coverage. His daughter was undergoing treatment for morphea, a rare skin disease.
'After multiple rounds of back and forth and a justification by the doctor, the company accepted our request for cashless coverage," he said.
What insurers say
Insurance companies argue that AYUSH claims are treated like any other.
'We have observed a significant increase in the uptake of AYUSH treatments under health insurance. From FY24 to FY25, AYUSH claims rose over 30% and the amount paid grew around 48%," said Bhaskar Nerurkar, head - health administration team, Bajaj Allianz.
A major challenge is the lack of standard treatment protocols.
'For the same condition, AYUSH medical management could differ greatly from allopathy. Sometimes insurers take an arbitrary stance on whether IPD was needed," said Sreejith Edamana, COO, Apollo AyurVAID.
He added, 'More than 80% of our urban patients have insurance coverage, so it is critical to make the process seamless. Industry conversations to improve this are underway."
Edamana also flagged CGHS pricing issues.
'Some insurers demand discounts on outdated CGHS rates last updated in 2016. This becomes a loss for everyone—patient, hospital, and insurer," he said.
What patients should know
Before opting for AYUSH treatment, confirm if your chosen hospital is in-network and NABH-accredited.
Admission to an AYUSH hospital must be based on prior consultation and clear diagnosis by a recognised practitioner. Missing documents or unclear justification for hospitalisation often lead to claim rejection, said Bhabatosh Mishra, COO at Niva Bupa.
'You cannot simply go to an AYUSH center and get admitted. There must be a prior consultation with recognised AYUSH doctors and diagnostic reports justifying IPD treatment," he added.
Hospitals must meet specific standards: at least five IPD beds, qualified practitioners available 24/7, and dedicated therapy sections.
Mishra said that they have seen some AYUSH centers listed on travel aggregator websites offering a pleasant stay or organising an ayurveda retreat.
"If you are a hospital treating ailments, how could you project yourself as a hotel?" he said.
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Also distinguish preventive vs curative care.
'Insurance covers treatment for disease, accident or infection. But preventive care—like managing blood sugar or BP without a formal diagnosis—may not be covered," said Bajaj's Nerurkar.
Watch out for inconsistencies in hospital records.
'Sometimes the supervising doctor is qualified, but internal papers may mention someone else. That creates grounds for rejection," said Arora of Insurance Samadhan.
As AYUSH gains ground, coordination between insurers and AYUSH hospitals is essential. Standardised packages and transparent billing could enable smoother, cashless claims. Curiously, even Ayushman Bharat Pradhan Mantri-Jan Arogya Yojana (AB-PMJAY), the government's flagship health scheme, is yet to include AYUSH treatments in its coverage.
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