By G.S. Bhalla, Co-founder and CEO, Cosentus
Picture a busy OPD in a 300-bed hospital in Pune, Hyderabad, or Gurugram. Doctors are triaging. Nurses are running. The imaging suite is fully booked. Somewhere down the corridor, a billing executive is staring at a stack of rejected insurance claims. Some are missing pre-authorisation codes. Some carry incorrect ICD entries. Some will take three weeks and four phone calls to unravel.
The hospital’s bed occupancy is 80 per cent. Its cash flow looks nothing like it. This is not a story about fraud or incompetence. It is infrastructure.
The moment I understood the scale of the problem here was not in a boardroom. It was in a conversation with a CFO at a mid-sized hospital in South India who told me, matter-of-factly, that his team had ₹40 crore sitting in accounts receivable older than 180 days. He shrugged. He had learned to treat it as a permanent feature of the balance sheet. It is not. It is a choice.
In FY2023–24, health insurers in India disallowed claims worth ₹15,100 crore. This insurer-side figure bundles exclusions, fraud flags and documentation gaps; it is not a direct measure of hospital leakage, but it does quantify the scale of friction in the claims pipeline. That friction ultimately constrains hospital working capital.
A denial does not announce itself loudly. It appears as a line in an ageing accounts receivable report that most hospital boards rarely see. It accrues over weeks. By the time it surfaces as a cash flow problem, it has already delayed a hiring decision, deferred an equipment upgrade, or forced short-term borrowing that erodes margin.
The leak is invisible until it is expensive.
The instinct is to look at the United States and conclude that even the most sophisticated markets have not solved this. American providers spent an estimated $25.7 billion on claims adjudication in 2023 alone. That is true.
Having spent more than two decades building revenue cycle systems in the US before working with hospitals in India, I have seen how these challenges change as healthcare systems scale.
But the US story is not a counsel of despair. It is a lesson in sequencing. American hospital systems digitised claims infrastructure and standardised electronic interchange under HIPAA across the 1990s and 2000s, long before the current wave of clinical AI. They harvested foundational automation gains first. The treadmill they face now is marginal and complex. India has not yet built that foundational layer. That leaves meaningful gains on the table if the sequencing is right.
So why is the sequencing wrong? Because clinical AI is visible. It has a face: a scan, a diagnosis, a life saved. It generates a press release. It earns clinician buy-in, investor enthusiasm and board applause.
Revenue cycle infrastructure is invisible by design. When it works, nothing happens. Claims clear. Cash arrives. The hospital functions. When it fails, the failure diffuses slowly into the balance sheet and is attributed to payer behaviour or market conditions rather than to a correctable process gap.
This is a capital allocation problem disguised as a technology problem.
Hospitals are not short of tools. They are short of the organisational decision to treat the revenue backbone as strategic infrastructure rather than back-office support. The CFO who builds a denial management playbook and reduces leakage rarely makes headlines. The one who deploys a radiology AI often does. The incentive structure is not corrupt. It is simply pointed in the wrong direction.
The blueprint is not complicated.
Assign single ownership for the end-to-end revenue cycle, from insurance verification at registration through claims submission and denial management to payment posting. One leader. One P&L view. One set of KPIs. Run a 90-day denial reduction sprint. Track denial rate by payer category, days in accounts receivable, and net collection rate weekly at the leadership table. Deploy automation at the highest-friction points first: eligibility checks at the front door, pre-submission scrub rules that catch payer edits before they become rejections, and prioritised appeals queues that do not rely on individuals remembering to follow up.
This is plumbing. Plumbing compounds.
Pradhan Mantri Jan Arogya Yojana (PMJAY) now empanels a very large share of India’s hospital network, which makes empanelment the practical reporting lever at the national scale, far broader than accreditation programmes that cover only a fraction of facilities. Require empanelled hospitals to publish quarterly denial rates, days in AR and net collection rates to a central dashboard. No mandates on how to fix the numbers. Just transparency.
In India right now, the highest-value intervention in healthcare is not the next diagnostic algorithm. It is the decision to instrument hospital finances with the same seriousness applied to clinical quality. Do we want hospitals that look technologically advanced, or hospitals that are financially durable enough to keep advancing?
That question deserves an answer before the next procurement committee approves the next shiny tool.