India's healthcare services stocks rallied on Monday after the government announced the first major overhaul of the Central Government Health Scheme (CGHS) since 2014, revising rates for nearly 2,000 medical procedures. The new rates will come into effect from October 13.

Shares of Apollo Hospitals rose as much as 3.8%, Max Healthcare gained 4%, Fortis Healthcare surged 4.8%, Narayana Hrudayalaya climbed 3.2% higher, and Yatharh Hospital and Trauma Care shot up 5% in morning trade.

What Has Changed?

Under the new structure, hospital charges will vary by accreditation status, city category, and ward entitlement.  National Accreditation Board for Hospitals (NABH)-accredited facilities will serve as the base rate, while non-accredited hospitals will receive 15% lower rates. Additionally, treatment costs in tier 2 and tier 3 cities will be priced 10–20% below those in tier 1.

The CGHS revamp addresses long-standing concerns from private hospitals that earlier packages were outdated and failed to reflect the rising costs of medical care. The move is expected to improve participation from private hospitals and ease patient access to cashless treatment.

Impact On Medical Procedures

According to reports, DAM Capital estimates that the revised CGHS structure could result in an average increase of 25% - 30% across major medical procedures.

Among listed hospital operators, Fortis, Max Healthcare, Narayana Health, and Yatharth Hospitals are expected to gain the most, given their higher exposure to government healthcare schemes, with Yatharth's share estimated at around 35%.

Other players such as Apollo Hospitals (9% exposure), Max Healthcare (21.8%), Global Health (18%), and Narayana Health (18%) are also likely to benefit from the revision.

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