Covid Scam in Odisha; CAG finds Rs 160 Crore Excess Payments to Pvt Hospitals

Bhubaneswar: A performance audit by the Comptroller and Auditor General (CAG) has unveiled financial irregularities totaling ₹161 crore in payments made by the Odisha government to private hospitals designated as Covid-19 treatment facilities between 2019 and 2022. The report, presented in the State Assembly, has highlighted lapses in bill verification, inflated claims, and manipulation of patient records, exposing significant gaps in the oversight and management of public funds during the pandemic.

The Odisha Health and Family Welfare Department received ₹2,868.80 crore from various sources, including the State Disaster Relief Fund and the Emergency Covid Response Package. However, only 64% of the ₹861.97 crore allocated under Emergency Covid Response Package-II was utilized by March 2022, with expenditures for several initiatives falling below 50% of their planned budgets. Despite this underutilization, payments to private hospitals were riddled with irregularities, raising concerns over mismanagement and the inefficient use of resources.

Among the findings, eight private hospitals received ₹144.88 crore without proper scrutiny of their claims. SUM Hospital in Bhubaneswar, in particular, was found to have the highest financial irregularity, receiving ₹78.67 crore between April 2021 and January 2022. These payments were made without any verification or countersignature by authorized medical officials or the Bhubaneswar Municipal Corporation (BMC). The claims were approved based on abstract bills rather than detailed documentation, severely undermining accountability. Hi-Tech Hospital, also in Bhubaneswar, received ₹15.69 crore during August 2020 to February 2022 without submitting patient-wise documentation. Similarly, Blue Wheel Hospital and KIIDS in Bhubaneswar received payments of ₹7.75 crore and ₹7.36 crore, respectively, without adequate scrutiny of their claims.

The audit further revealed systemic issues with billing practices across these hospitals. For instance, Neelachal Hospital in Bhubaneswar discharged 332 patients directly from ICU beds without transferring them to general wards, as per medical protocols. This raised concerns that hospitals were inflating claims by unnecessarily keeping patients in higher-cost ICU beds, prioritizing financial gain over patient welfare. Ashwini Hospital in Cuttack was found to have submitted claims with repeated use of the same bed numbers for multiple patients, resulting in excess payments amounting to ₹2.62 crore.

Additionally, discrepancies were noted in the diet allowances claimed by hospitals for medical staff. Ashwini Hospital, in particular, claimed ₹74.7 lakh in diet allowances retrospectively, despite explicit guidelines prohibiting retrospective claims. At least eight other hospitals claimed inflated diet allowances totaling ₹2.6 crore, even though they had not deployed the number of doctors and paramedics for which they claimed allowances.

Another significant irregularity involved the non-deduction of costs for PPE kits supplied by the government to hospitals free of charge. Ashwini Hospital in Cuttack was the highest beneficiary in this category, with ₹67.72 lakh worth of PPE kits unadjusted in its bills. SUM Hospital, Aditya Ashwini Hospital, and several others in Khurda district were also involved, with the total excess payment for PPE kits reaching ₹2.73 crore. Despite being provided these kits by the Odisha State Medical Corporation Limited (OSMCL) free of cost, hospitals included their costs in bills submitted for payment, resulting in further misappropriation of funds. The Cuttack Municipal Corporation acknowledged these observations and stated that the cost of PPE kits would be deducted from pending bills.

The audit uncovered widespread malpractice, particularly in hospitals’ failure to submit patient-wise data, inflated ICU occupancy claims, and repeated billing for the same resources. SUM Hospital, Hi-Tech Hospital, and others manipulated billing practices, exploiting the lack of stringent checks and balances during the pandemic.

📌Covid Scam comes to light in #Odisha; CAG finds more than Rs 160 Crore excess payment to private hospitals in Bhubaneswar and Cuttack for Covid treatment between 2020 and 2022. Sum Hospital, Hi-Tech Hospital, Blue-wheel Hospital, KIDS, Sanjeevani Hospital, Neelachal Hospital,… pic.twitter.com/BRkOrPL3cI

— TNI (@TNITweet) December 7, 2024