India Pays Hospitals to Get Accredited, But Most Are Not Buying It

When India launched the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana, or AB-PMJAY, in 2018, it did so on a scale no other country had attempted. The scheme, centrally administered by the National Health Authority, promises hospitalisation coverage of up to 500,000 rupees per eligible family per year and reaches nearly 600 million people, roughly 45 percent of India’s population. But coverage alone does not guarantee healthier patients. Global evidence has repeatedly shown that low-quality healthcare can be as damaging as no healthcare at all, and India’s earlier publicly financed insurance scheme, the Rashtriya Swasthya Bima Yojana, struggled with weak governance and few mechanisms to regulate the standard of care. Quality, not just access, was therefore written into AB-PMJAY’s DNA from the start, and one of its earliest tools was a policy that pays hospitals a premium for holding quality certifications and accreditations.

A new policy and practice review published in Frontiers in Public Health takes that accreditation-based incentive policy apart, testing the assumptions on which it was built against real implementation data. The authors, from the Goa Institute of Management and the World Health Organization Country Office for India, draw on a mixed-methods field study commissioned by the National Health Authority and conducted in 2021, then extend the picture with certification uptake figures through September 2026. Their findings are sobering: uptake of the certification has been low, concentrated among hospitals that were already accredited, and no clear link between certification tier and patient satisfaction has been demonstrated, even though higher tiers did correspond to better-standardised structures and processes in the facilities observed.

The incentive policy, introduced in 2019, stratifies empaneled hospitals into four quality levels. Gold and Silver align with existing national accreditation programmes, chiefly those of the National Accreditation Board for Hospitals and Healthcare Providers, or NABH, while Bronze was created as a new, less demanding entry-level certification intended to start facilities on a quality improvement journey. Each tier earns a reimbursement premium above the baseline package rate: 5 percent for Bronze, 10 percent for Silver and 15 percent for Gold. On paper, the logic is simple. Reward hospitals for raising their quality credentials, attract accredited facilities into the scheme, and motivate those already inside to climb the accreditation ladder. The design rests on three implicit assumptions: that accreditation reflects clinical quality, that patients experience accredited care as better, and that the financial incentive outweighs the cost of obtaining accreditation.

The uptake data suggest the third assumption is where the policy most clearly falters. At the time of the underlying study in June 2021, 508 facilities held an AB-PMJAY quality certificate. By September 2026, that number had fallen to 380, comprising 82 Bronze, 141 Silver and 157 Gold certificates. The decline is concentrated in the lower tiers, where certificates must be renewed every two years and lapse if hospitals fail to progress or reapply. Only about 1.5 percent of the roughly 25,800 hospitals empaneled under the scheme hold any certification at all. Most early adopters were already accredited before the policy existed, and hospitals that never applied cited a lack of awareness or simply no perceived need. Many who did apply did so because district or state officials asked them to, rather than because the premium motivated them.

The economics explain much of this hesitancy. For a hospital already holding NABH accreditation, the marginal cost of the AB-PMJAY certificate is close to nothing, which is why such facilities dominate the Gold tier. For everyone else, the price of admission is steep: entry-level NABH certification costs between 21,000 and 52,000 rupees depending on facility size, while full accreditation carries an application fee of 25,000 to 150,000 rupees plus annual fees of 110,000 to 440,000 rupees, before accounting for the infrastructure and staffing upgrades needed to meet 100 standards and 651 objective elements. Crucially, the purchasing power of AB-PMJAY itself is limited. The scheme and its state counterparts account for only about 3.4 percent of current health expenditure in 2022-23, so for a typical private hospital the premium applies to just one revenue line among many. In interviews, most facilities with higher accreditation levels attributed their accreditation to brand-value considerations, not the incentive.

On the first assumption, the evidence is more encouraging but incomplete. Trained observers scored 21 certified private hospitals in Uttar Pradesh, Haryana and Gujarat on a 62-item structure-process-outcome checklist. Mean overall scores rose with accreditation status: 4.6 out of 5 in fully accredited hospitals, 3.5 in entry-level certified hospitals and 2.7 in hospitals without NABH accreditation, with the least variation among the fully accredited group. Claims from accredited hospitals were also settled faster and carried higher values. Accreditation, in other words, does track structural and process standardisation. But clinical outcomes as such were not measured, and the international literature remains mixed on whether accreditation translates into better results for patients across different settings.

The patient experience assumption fared worst of all. Around 200 beneficiaries discharged from the observed hospitals were surveyed by telephone using the Patient Satisfaction Questionnaire Short Form. Counterintuitively, mean overall hospital ratings on a ten-point scale were highest in hospitals without NABH accreditation, at 9.2, compared with 8.9 in entry-level certified hospitals and 7.9 in fully accredited hospitals, though the study reported these differences as not statistically significant. Complaints about out-of-pocket payments were the most common grievance overall and were most frequent among patients of fully accredited hospitals. The authors caution that this pattern does not show accreditation lowers satisfaction, since case mix, hospital size and rising patient expectations could all contribute, but it does mean the second design assumption cannot simply be taken for granted.

The contrast with other low- and middle-income countries is instructive. In Indonesia, the national health insurance scheme JKN embedded accreditation incentives within a programme covering most of the population, dramatically accelerating adoption. In Ghana, accreditation by the National Health Insurance Authority is a legal requirement for any provider wishing to serve scheme members, and 78 percent of assessed private providers were accredited. Both schemes made accreditation a condition of participation in a purchaser that dominated providers’ revenue, whereas AB-PMJAY made it a voluntary premium within a scheme most private hospitals can afford to treat as marginal. India’s input-based approach also diverges from globally endorsed quality frameworks that prioritise outcome-based measures of performance.

The authors argue the policy should be treated as a foundational phase rather than a comprehensive instrument, and they offer concrete recommendations. Accreditation tiers could remain an eligibility floor while a defined share of the premium gradually shifts to performance indicators, with risk adjustment by package and hospital size. Explicit financial or technical assistance could offset accreditation costs for smaller facilities. A common national quality-incentive schedule, adopted jointly by AB-PMJAY, central government health schemes and state programmes, could make quality-linked payments consequential across the whole public purchasing landscape. The Ayushman Bharat Digital Mission provides the data infrastructure for such a transition, and machine-learning tools applied to existing claims data could support fraud detection, risk adjustment and the extraction of outcome indicators, provided data governance, algorithmic transparency and equitable digital capacity are addressed.

For a programme of AB-PMJAY’s scale, the stakes extend far beyond India. As low- and middle-income countries increasingly turn to publicly financed insurance to pursue universal health coverage, the question of how to purchase quality, not merely volume, remains unresolved. This review suggests that paying hospitals for credentials is administratively simple and a reasonable first step, but that durable quality gains will require incentives tied to what actually happens to patients, and a value proposition that makes accreditation worth the investment for the hospitals that most need it.

Subject of Research: Accreditation-linked financial incentives for quality of care under India's publicly financed health insurance scheme AB-PMJAY

Article Title: Driving the quality of care in publicly financed health insurance: a close look at the accreditation-based incentive policy of AB-PMJAY in India

Article References: Raza, A., Achungura, G., Furtado, K. M., Anand, J. S., Vaz, N., & Phadnis, S. (2026). Driving the quality of care in publicly financed health insurance: a close look at the accreditation-based incentive policy of AB-PMJAY in India. Frontiers in Public Health, 14, Article 1940730. https://doi.org/10.3389/fpubh.2026.1940730

Image Credits: AI Generated

DOI: 10.3389/fpubh.2026.1940730

Keywords: AB-PMJAY, accreditation, healthcare quality, publicly financed health insurance, universal health coverage, India, NABH, value-based purchasing, patient satisfaction, health policy, quality certification, LMIC