Guidelines issued for private hospitals in Tier 2 and Tier 3 cities under PMJAY

The centre has come out with broad guidelines for private investments in setting up of hospitals in Tier 2 and Tier 3 cities that will cater to the Pradhan Mantri Jan ArogyaYojana (PMJAY) scheme for the economically weak.

The Pradhan Mantri Jan ArogyaYojana (PMJAY) is a centrally sponsored scheme launched on 23 September 2018 for providing hospitalisation cover of up to Rs5 lakh per family per year to over 100 million poor and the deprived families (or approximately 500 million people) in the empanelled hospitals throughout the country. 
The guidelines are intended to improve the supply of healthcare services in the underserved areas to ensure maximum utilisation of the benefits under PMJAY and to improve the demand for quality healthcare services at affordable prices to general public.
Under the guidelines, hospital have been categorised into three:
  • Model I     :  Doctor owner (30 to 50 beds)
  • Model II    :  Doctor manager partnership-Multispecialty (100 beds)
  • Model III   :  Multispecialty (100 beds or more)
The guidelines include government interventions to incentivize private sector in land allotment, facilitating various clearances with specific timelines and viability gap funding for improving the financial viability and bankability of the project.
Private sector hospitals will operate on a `build, design, finance, manage operate and maintain’ model with quality standards. Take market risk and provide services at PMJAY rates.
Government will earmark and provide sufficient unencumbered land on lease or through bidding, facilitate various permissions and clearances through special window with timelines, compulsory empanelment of the hospitals for PMJAY and other government scheme, ensure timely payments for services, VGF up to 40 per cent of the total cost of the project, provide gap funding up to 50 per cent of tax on capital cost, restoration of status of hospital as industry for getting benefit of VGF, etc.
All states and union territories have signed memoranda of understanding (MoU) for implementing PMJAY, out of which 29 have already launched the scheme.