Thiruvananthapuram: Managements of private medical colleges have informed the state government that they will pull out of the Karunya Health Insurance Scheme from next month as they have not received payments for the free treatment delivered under the scheme. The Management Association stated that each medical college is owed between ₹20 crore and ₹30 crore, with arrears pending for over a year. They have conveyed to the Chief Minister that unless at least half of the pending amount is released, they will be compelled to withdraw from the scheme.

In view of the government’s financial constraints, a bill discounting mechanism had earlier been introduced to route Karunya arrears to hospitals through banks. Under this arrangement, banks would disburse the pending treatment costs to medical colleges and the government would later repay the banks with interest.

The managements had agreed to bear 5% of the interest payable to banks as part of the understanding with the government. However, Association president Anil Kumar Vallil said the government subsequently failed to honour this arrangement, leading to the present payment crisis.

At present, only small instalments are occasionally released under the old system. With crores of rupees remaining unpaid, medical colleges say they are struggling to meet operational expenses, including salaries of doctors and other staff. Owing to the fund crunch, they are also unable to procure medicines and surgical equipment on time, the Association stated in its memorandum to the Chief Minister.

Karunya-funded treatment is currently being provided in 362 private hospitals, including medical colleges. Several private hospitals have already withdrawn from the scheme due to non-payment of dues.

A total of 43.07 lakh families, comprising 78,83,794 beneficiaries, are covered under the Karunya scheme.