Hospital Billing Process in India: OPD, IPD and TPA Billing Explained

Why billing is where hospitals lose money

Most revenue loss in hospitals is not fraud. It is services that were given but never charged: a test ordered verbally, a medicine issued from the ward stock, an extra day in the room, a doctor visit not entered. It is also claims rejected by insurers because a document was missing, and deposits that were never adjusted.

A clear billing process reduces these losses by charging services at the point they are ordered or given, and by bringing every charge for a patient into one running account. This guide walks through the OPD, IPD and TPA billing steps that Indian hospitals follow, and the controls that keep them accurate. To see how hospital billing software supports each step, see our product page.

OPD billing process, step by step

1. Patient registers and the consultation fee is charged automatically by doctor and visit type (new, follow-up, emergency).
2. Procedures and tests ordered by the doctor are added to the same bill from the doctor's screen.
3. Payment is collected by cash, UPI, card or a mix, and a receipt is printed or shared on the patient's phone.
4. Lab and pharmacy charges are added when the test is done or medicine dispensed.
5. The day-end report shows collections by doctor, service and payment mode.

When OPD billing is linked to the live OPD queue, every token has a matching bill, so OPD visits and revenue can be reconciled.

IPD billing process: from admission to final bill

Inpatient billing is more complex because charges accumulate over days and come from many departments. A good system keeps a running bill from admission to discharge.

• Admission and deposit: collect an advance deposit, record the payer (self, insurer, TPA, corporate or scheme) and the room category.
• Room and bed charges: charged automatically per day or per shift, with changes on transfer.
• Doctor visits and procedures: entered by the ward or OT team and priced from the tariff.
• Lab, radiology and pharmacy: added when ordered or issued, including ward stock used.
• Interim bills: shared with the family or the TPA during the stay.
• Final bill and settlement: deposits adjusted, discounts applied with approval, refund or balance collected, and the bill matched with the discharge summary.

This works best when billing is part of the same system as IPD management, laboratory and pharmacy, so no charge has to be typed twice.

Packages, deposits and discounts

Packages bundle a procedure with a fixed price, for example a delivery or a cataract surgery, covering a defined stay, consumables and tests. The software should track what is included, charge extra items outside the package, and show whether the package is profitable.

Deposits need clear receipts, adjustment against the final bill and recorded refunds. Discounts should need a reason and an approver, and appear in a report, so they do not quietly reduce revenue.

How does TPA and insurance billing work?

Cashless treatment through insurers and Third Party Administrators (TPAs) is a large share of revenue for many hospitals. The billing workflow differs from self-pay.

1. Record the insurer or TPA, policy details and the patient's ID at admission.
2. Send the pre-authorisation request with the estimated cost and clinical details.
3. Track the approved amount and any enhancements during the stay.
4. At discharge, split the bill into the payer's share and the patient's share (non-payable items, co-pay, deductions).
5. Submit the final claim with the discharge summary, bills and reports.
6. Track the claim as receivable until it is settled, and record any deductions.

The timelines are tight. Under the IRDAI Master Circular on Health Insurance Business of 29 May 2024, insurers must decide on a cashless authorisation request within one hour of receiving it and grant final discharge authorisation within three hours of the hospital's request, and insurers or TPAs collect the required documents from the hospital rather than from the patient. The same circular asks insurers to onboard hospitals on the National Health Claims Exchange (NHCX); our guide to NHCX for hospitals explains what that involves. For government schemes such as PM-JAY, read our guide to PM-JAY, TPA and insurance claims.

GST basics for healthcare billing

The following is general information, not tax advice. GST rules for healthcare depend on the facts of each case and change from time to time, so confirm your billing setup with a chartered accountant.

Because most clinical services are exempt, hospitals usually cannot claim input tax credit on costs related to them. Your billing software should let you mark each service and item as exempt or taxable with the correct rate and HSN or SAC code, so invoices and reports are right from the start.

Billing reports owners should review

• Daily collection report by payment mode, cashier and branch.
• Revenue by department, doctor and service, separating a doctor's own consultations from total hospital revenue.
• Outstanding receivables from TPAs, insurers and corporates, by age.
• Discounts and cancellations with the approver's name.
• Deposits held for patients still admitted.
• Package profitability, comparing package price with actual services used.
• GST summary of taxable and exempt supplies for your accountant.

Common billing mistakes and how software prevents them

Reviewing the discounts, cancellations and receivables reports once a week is one of the simplest ways for an owner to protect revenue.

What billing software should do to support this process

• Tariffs by room category and payer, with packages.
• Automatic charges from OPD, IPD, lab, pharmacy and OT.
• Deposits, refunds, interim and final bills.
• TPA and insurer master lists with claim tracking.
• Multiple payment modes, split payments and receipts.
• Discounts with reason and approval, and bill cancellation controls.
• Exempt and taxable items with correct codes.
• Role-based access and an audit trail on every change.

How Sehat Nxt helps

Sehat Nxt hospital billing brings OPD and IPD bills, deposits, payer and TPA selection, multiple payment modes and daily reports into the same system as the live OPD queue, IPD, lab and pharmacy, so services are charged where they happen. Owners with several branches see revenue for each branch and all branches together on the multi-branch dashboard.

Plans start from ₹999 per month. Book a free demo and bring one of your recent IPD bills to compare.