Hospital stocks jump on CGHS rate revision

The new CGHS rates, effective October 13, 2025, update payments for almost 2,000 medical procedures.

Health industry bodies welcome CGHS’ move to revise rates after 15 years  File Photo/ Wolters Kluwer

CHENNAI: Shares of leading hospital chains in India saw a sharp rise on Monday morning after the government announced a major update to the Central Government Health Services (CGHS) reimbursement rates. The move, aimed at modernizing the rates for medical procedures, provided a boost to private hospitals’ revenue prospects.

On Monday at 11.20 AM, Fortis Healthcare share were up around 5 percent, trading near Rs 1,027 a unit. While, Max Healthcare and Apollo Hospitals rose about 5 percent to Rs 1,347, and 3.7 percent to Rs 7,730 respectively.

Other hospital stocks, including Narayana Health and Global Health, also gained during early trading, reflecting strong investor optimism.

The new CGHS rates, effective October 13, 2025, update payments for almost 2,000 medical procedures. Key changes include:

• Hospital Accreditation: NABH-accredited hospitals will receive standard rates, while non-accredited hospitals will get 15% less.

• Hospital Type: Large super-specialty hospitals (200+ beds) will earn 15% above the base rate.

• City Category: Tier-2 and tier-3 city hospitals will have rates 10–20% lower than tier-1 cities.

• Ward Type: Reimbursement will also vary depending on the patient’s ward entitlement.

This overhaul addresses long-standing concerns that CGHS rates were outdated and insufficient to cover modern healthcare costs, including staff and equipment expenses.

Analysts estimate that the rate revision could increase reimbursements by 25–30% on average. Hospitals with significant CGHS exposure, such as Fortis, Max Healthcare, and Apollo Hospitals, are expected to benefit the most. The revised rates may encourage more private hospitals to participate in the scheme, improving patient access to cashless treatments.

Shares of leading hospital chains in India saw a sharp rise on Monday morning after the government announced a major update to the Central Government Health Services (CGHS) reimbursement rates. The move, aimed at modernizing the rates for medical procedures, provided a boost to private hospitals’ revenue prospects.