In a major relief for ex-servicemen and their families, the Central Government Health Scheme (CGHS) has issued a clear clarification on the categorisation of cities applicable to beneficiaries of the Ex-Servicemen Contributory Health Scheme (ECHS). This move is expected to put an end to long-standing confusion regarding treatment charges at CGHS-empanelled hospitals, especially for those residing in satellite towns located near major cities.
For years, ECHS beneficiaries living in areas close to large urban centres faced uncertainty over whether their medical treatment would be charged at metro-level rates or lower-category city rates. This often resulted in disputes between hospitals and patients and, in some cases, additional out-of-pocket expenses.
CGHS has now clarified which satellite cities will be treated on par with major cities for the purpose of medical reimbursement and hospital charges. The clarification follows an order issued on December 5, 2025, and aims to ensure uniform implementation of CGHS rates for ECHS beneficiaries.
The primary objective of this decision is to eliminate ambiguity and ensure that eligible beneficiaries receive treatment at the correct rates, irrespective of whether they live in a core city or an adjoining satellite town.
ECHS beneficiaries are entitled to treatment at CGHS-empanelled hospitals. However, CGHS treatment rates vary depending on the category of the city. Until now, beneficiaries living near major cities often faced confusion over which rate category applied to them.
This uncertainty frequently led to disagreements during hospital billing and caused financial stress for patients and their families. With the latest clarification, CGHS has ensured that beneficiaries residing in designated satellite towns will now be charged at rates applicable to the corresponding major city.
Under CGHS, treatment rates are determined based on city categories, commonly referred to as X, Y, and Z categories. This classification is linked to House Rent Allowance (HRA) categories applicable to central government employees.
Hospitals empanelled under CGHS follow these categories while charging for medical procedures, room rent, diagnostics, and other healthcare services. The revised clarification specifically addresses how satellite cities will be mapped to these categories.
As per the clarification:
Certain satellite cities located near the national capital will now be treated at par with Delhi, which falls under the X-category (Tier-1) for CGHS rates.
Jalandhar Cantonment will be treated at par with Jalandhar, which comes under the Y-category (Tier-2).
Goa and Port Blair will continue to be covered under Y-category (Tier-2) rates.
Panchkula and SAS Nagar (Mohali) will be treated at par with Chandigarh, which is also categorised as Y-category (Tier-2).
This equivalence ensures that beneficiaries residing in these locations receive treatment at uniform rates, matching those of the nearest major city.
CGHS has acknowledged that many ECHS beneficiaries reside in satellite towns surrounding major cities such as Delhi, Chandigarh, Goa, Jalandhar, and Port Blair. In the absence of clarity, hospitals often applied lower-category rates, leading to disputes and dissatisfaction.
With the updated clarification, hospitals and beneficiaries will now have a common reference point, reducing billing disputes and ensuring smoother access to medical services.
ECHS beneficiaries are advised to keep a copy of the updated clarification handy while visiting CGHS-empanelled hospitals. This will help avoid confusion during admission and billing, especially in satellite cities.
Experts believe this step will significantly improve transparency, protect beneficiaries from unnecessary expenses, and strengthen trust between patients and healthcare providers.
