Picture a busy billing desk at a 300-bed hospital. Bed occupancy is at 80 per cent. And somewhere down the corridor, a billing executive is staring at a stack of rejected insurance claims: missing pre-authorisation codes, incorrect ICD entries, documents that will take three weeks and four phone calls to unravel.
The care was delivered. The insurer owes the money. But it is not coming in.
Writing in Express Computer earlier this year, G.S. Bhalla of Cosentus described a conversation with a CFO at a mid-sized hospital in South India who had ₹40 crore sitting in accounts receivable older than 180 days. The CFO had learned to treat it as a permanent feature of the balance sheet. As Bhalla put it: "It is not. It is a choice."
The scale of the problem
In FY2023-24, health insurers in India disallowed claims worth ₹15,100 crore. That number bundles exclusions, fraud flags and documentation gaps, and it quantifies the friction in a claims pipeline that ultimately constrains hospital working capital.
Most of these are not clinical denials. The care was appropriate. The procedure was covered. The problem is documentation: a missing discharge summary, an incorrect diagnosis code, a pre-auth form not submitted in time. By the time the rejection surfaces as a cash flow problem, it has already delayed a hiring decision or forced short-term borrowing.
The leak is invisible until it is expensive.
Why it keeps happening
The billing desk at most mid-size hospitals is managing an enormous volume of paperwork across multiple insurers and TPAs, each with their own formats, timelines and query patterns. When a deadline is missed or the wrong document is attached, the claim is rejected. If the billing executive was managing fifteen other claims that day, something slips.
This is not negligence. It is a structural problem. As Bhalla notes, revenue cycle infrastructure is "invisible by design. When it works, nothing happens. When it fails, the failure diffuses slowly into the balance sheet," attributed to payer behaviour rather than a correctable process gap.
What actually changes
The solution is not more staff. It is removing friction at each step where claims break down: documents validated before submission, query responses drafted automatically from the right records, supervisors alerted when a claim stalls rather than discovering it weeks later in an AR report.
A hospital that submits cleaner claims, responds to queries faster and tracks every case to closure does not just reduce rejections. It shortens the entire revenue cycle.
The money is earned. The question is whether the process is in place to collect it.
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