CGHS – There is good news for about 50 lakh central government employees and about 65 lakh pensioners. After increasing the dearness allowance (DA) in the cabinet meeting held last Wednesday (October 1), the central government has taken another big step and made major reforms under the Central Government Health Scheme.

On Friday (October 3), the center revised the package rates of about 2,000 medical procedures. The latest changes in CGHS will come into effect from October 13. This is being said to be the biggest amendment in the last one and a half decade. Due to the old rates, not only central employees but also hospitals were facing problems.

Big problems will be solved

A major complaint from central government employees and pensioners was that CGHS-empanelled hospitals often refused to provide cashless treatment. Consequently, they had to pay substantial sums out of pocket for treatment and then wait for months for reimbursement.

Empanelled hospitals argued that the government’s package rates were outdated and low. Furthermore, hospitals were unable to receive timely payments. Therefore, hospitals were reluctant to offer cashless services to beneficiaries.

In August 2025, the National Federation of Central Government Employees (NFGCGEU) drew attention to this issue by submitting a memorandum to the government. It stated that the lack of cashless access was causing significant inconvenience to employees and pensioners. They were often denied medical treatment even in emergencies. These problems will now be addressed.

What are the new reforms?

The central government has set new rates for nearly 2,000 medical procedures, based on the city’s category (Tier-I, Tier-II, Tier-III) and the hospital’s quality (such as NABH accreditation).

Package rates in Tier-II cities will be 19% less than the base rate.

Package rates in Tier-III cities will be 20% less than the base rate.

NABH accredited hospitals will provide services at base rates.

Non-NABH hospitals will get 15% lower rates.

Super-speciality hospitals with more than 200 beds will get 15% higher rates.

What benefits will the employees get?

Central government employees will now have access to better healthcare services. Cardholders can now confidently seek treatment at empanelled hospitals.

Cashless treatment will be easier: With the rate revision, hospitals will find the new package rates attractive and will not hesitate in providing cashless treatment to CGHS card holders.

No more out-of-pocket expenses: Employees and pensioners will be less compelled to spend money out of pocket. They will no longer have to pay large sums upfront.

Reimbursement money will not be stuck: Another problem of the employees will be reduced as their money will not be stuck for months.