90%
Reduction in tax filing errors with GST-compliant billing software
25%
Improvement in TPA reimbursement rates with automated claim processing
70%
Hospital payments in India now linked to cashless TPA transactions
₹5 Cr
Annual turnover threshold above which e-invoicing is mandatory
GST in Healthcare — What's Taxable and What's Exempt
Understanding what is exempt and what is taxable is the foundation of GST-compliant hospital billing. The core exemption under Notification No. 12/2017-CT (Rate) covers healthcare services provided by a clinical establishment or authorised medical practitioner. Outside that definition, GST applies.
Exempt from GST (0%)
- Doctor consultation fees (OPD and IPD)
- Surgery and all medical procedures
- Diagnostic tests (when part of treatment)
- In-patient care — room, nursing, food for patient
- Room rent ≤ ₹5,000 per day (non-ICU)
- ICU, CCU, NICU, PICU — all room rents exempt
- Ambulance services
- Medicines given to admitted patients (composite)
- Health insurance premiums (from Sept 2025)
Taxable under GST
- 5% — Room rent above ₹5,000/day (full amount taxable)
- 5% — Most prescription medicines (retail/OPD pharmacy)
- 5% — Surgical gloves, diagnostic kits, bandages
- 5% — Food for visitors and non-patients (cafeteria)
- 12% — Medical equipment (capital goods)
- 18% — Cosmetic and elective plastic surgery
- 18% — Hair transplant procedures
- 18% — Wellness and preventive health packages
- 18% — Corporate health check-up packages
Critical room rent rule: The 5% GST on room rent above ₹5,000/day applies to the entire room rent amount — not just the portion above ₹5,000. A room at ₹6,000/day attracts ₹300/day in GST (5% of ₹6,000). Your billing software must be configured accordingly.
| Service / Item | GST Rate | ITC? | Notes |
|---|---|---|---|
| OPD consultation | Exempt | No | All specialist and GP fees |
| Surgery / IPD inpatient care | Exempt | No | Composite supply of healthcare |
| ICU / CCU / NICU rooms | Exempt | No | Always exempt regardless of rate |
| Room rent ≤ ₹5,000/day | Exempt | No | Below threshold |
| Room rent > ₹5,000/day (non-ICU) | 5% | No | Full amount taxable, not excess only |
| Retail pharmacy sales (OPD) | 0-18% | Yes | Per HSN drug slab |
| Wellness / preventive packages | 18% | Yes | Corporate health check-ups |
| Cosmetic surgery | 18% | Yes | Elective procedures |
| Medical equipment sale | 12% | Yes | Capital goods |
| Ambulance services | Exempt | No | Patient transport |
Key Features of GST-Compliant Billing Software
A hospital billing system in 2026 must do far more than generate invoices. Here are the eight capabilities every hospital must demand from their billing software:
E-Invoice Generation
Automatic e-invoice via GST IRP portal — IRN number, QR code, and digital signature without manual steps.
Mandatory above ₹5 Cr
HSN / SAC Code Auto-Apply
Pre-mapped SAC codes for every service type and HSN codes for every pharmacy item — no manual lookup, no errors.
Zero manual work
GSTR-1, GSTR-3B Reports
Auto-generated GST return reports from billing data. Month-end filing prep with zero manual compilation.
Saves days of work
Multi-Payment Mode
Cash, UPI, card, NEFT, insurance, PM-JAY, corporate credit, advance deposits — all in a single bill with split settlement.
All modes supported
TPA and Insurance Billing
Pre-auth requests, cashless settlement, claim documents, TPA-wise reconciliation, rejection resubmission.
Fully automated
Package Billing
Pre-defined surgery and treatment packages with included vs. excluded item tracking and automatic excess billing.
PMJAY ready
Multi-Department Charge Capture
Auto-pulls charges from OPD, pharmacy, labs, OT, and nursing in real time — nothing falls through the gap.
Real-time posting
Discount Control
Approval workflow for discounts above defined thresholds — prevents revenue leakage from unauthorised discounts.
Reduces leakage
E-Invoicing Compliance
E-invoicing is mandatory for hospitals with annual aggregate turnover above ₹5 crore for their taxable supplies. Since most healthcare services are exempt, e-invoicing primarily applies to pharmacy sales, cosmetic procedures, room rent above ₹5,000/day, and B2B invoices to TPAs and corporate clients.
How e-invoicing works
- Billing software generates invoice data in the prescribed JSON format
- System uploads it to the Invoice Registration Portal (IRP) via direct API
- IRP validates and assigns a unique IRN (Invoice Reference Number)
- IRP returns the signed e-invoice with embedded QR code
- QR code prints automatically on the physical invoice
- Data flows directly to GSTR-1 — no manual filing required
BillMedQR IRP integration: BillMedQR by Akeera connects directly to the GST IRP portal. IRN generation, QR code embedding, and GSTR-1 auto-population happen automatically — your billing team never visits the IRP website manually.
HSN and SAC Codes for Hospital Services
Every taxable line item on a hospital bill must carry the correct HSN (goods) or SAC (services) code. Your billing software should apply these automatically without any manual input.
SAC 9993
Human health and social care services
Parent category — Exempt for clinical care
SAC 999311
Inpatient services
IPD care, surgery, nursing — Exempt
SAC 999312
OPD consultation
Medical and dental consultations — Exempt
SAC 999315
Medical laboratory services
Lab tests as part of treatment — Exempt
SAC 999316
Ambulance transport
Patient transport — Exempt
SAC 999319
Other health services
Cosmetic, wellness — 18% GST
HSN 3004
Medicines — retail pharmacy
Most Rx drugs — 5% GST
HSN 9018
Medical instruments and equipment
Surgical instruments — 12% GST
HSN 3006
Pharmaceutical goods
Diagnostic kits, surgical catgut — 5%
HSN 3002
Vaccines and blood products
Vaccines — Exempt / 5% depending on type
Why manual SAC code entry is high-risk: One wrong SAC code on an invoice creates a compliance mismatch in GSTR-1 that triggers notices during assessment. BillMedQR has every service pre-mapped to its correct SAC or HSN code — no manual decision required at the billing counter.
TPA and Insurance Billing Workflow
With over 70% of hospital payments now linked to cashless TPA transactions, TPA billing is where hospital revenue management is won or lost. A billing system that handles TPA poorly means unpaid claims, cash flow gaps, and rejection cycles that consume staff hours.
Pre-authorization request
At admission, the billing system submits pre-auth to the TPA with patient policy details, diagnosis code, and estimated treatment cost. TPA validates the policy and approves an amount electronically.
Real-time charge accumulation
Throughout the admission, the billing system captures charges from OPD, pharmacy, labs, OT, and nursing automatically. Billing runs continuously — not started at discharge.
Interim claims for long-stay patients
For ICU or long-stay patients, the system generates interim claims every 5 to 7 days. This prevents cash flow gaps — hospitals cannot wait 15 days until discharge to submit claims.
Final claim submission at discharge
At discharge, the system generates the final bill, packs supporting documents (discharge summary, lab reports, OT notes, prescriptions), and submits the claim electronically to the TPA.
Tracking, reconciliation and resubmission
The system tracks claim status — submitted, approved, partially approved, or rejected — and triggers resubmission workflows for rejected claims with the rejection reason documented for follow-up.
Common TPA rejection causes: Missing pre-auth for a procedure, diagnosis code mismatch, incomplete discharge summary, charges exceeding approved amount, and non-covered procedures billed under cashless. BillMedQR pre-validates every claim against TPA rules before submission — catching errors before they become rejections.
Multiple Payment Modes
A hospital billing system must handle every payment method Indian patients and insurers use — and produce proper receipts and accounting entries for each.
Cash
Proper receipts with denomination tracking
UPI
QR generation and transaction ID capture
Card (POS)
Credit and debit card with POS integration
NEFT / Bank Transfer
UTR tracking and reconciliation
TPA / Insurance
Cashless settlement and reimbursement processing
PM-JAY / Government
Ayushman Bharat package billing and claim submission
Corporate Credit
Company billing with employer credit tracking
Advance Deposit
Deposit collection and adjustment at discharge
Refund Processing
Partial and full refunds with proper accounting
Package Billing
Package billing is essential for surgical procedures, maternity care, and PM-JAY empanelled hospitals. A modern billing system must handle all package scenarios without manual override.
| Package Scenario | How BillMedQR Handles It |
|---|---|
| Pre-defined surgery package | Select package from master list — inclusions auto-populate, exclusions trigger separate billing |
| Package vs. actual cost comparison | System tracks actual charges consumed vs. package value — highlights overruns in real time |
| Inclusive vs. exclusive items | Configure which services are inside the package and which are billed extra — GST applied correctly to each |
| PM-JAY package billing | NHA package codes pre-loaded, pre-auth and claim submitted through NHA portal automatically |
| Corporate package discounts | Company-specific rate masters applied automatically when corporate patient is identified |
| Package upgrade when limits exceeded | Alert fires when patient charges approach package ceiling — upgrade or excess billing decision captured |
| Maternity packages | Normal delivery, C-section, and complication upgrade scenarios with standard inclusions configured |
Essential Reports for Hospital Finance Teams
A hospital billing system without good reporting is a billing system that creates work, not visibility. These are the reports every hospital finance team needs daily, weekly, and monthly.
Daily Collection Report
Cash, UPI, card, insurance — total collections by payment mode with department breakdown
Department-wise Revenue
OPD, IPD, pharmacy, lab, OT revenue broken out by department for P&L reporting
TPA Outstanding Report
Pending TPA claims by insurer with submission date, amount, and aging buckets
GST Summary Report
Taxable vs. exempt revenue split, GST collected by rate (5%, 12%, 18%), ITC available
GSTR-1 / GSTR-3B
Ready-to-file return reports generated from billing data — no manual compilation
Discount Analysis
Discounts by doctor, department, and approver — identifies discount abuse patterns
Outstanding Dues Report
Patient and corporate outstanding with aging — 0–30, 30–60, 60–90, 90+ days
Cash Flow Forecast
Expected TPA settlements, pending collections, and projected weekly revenue inflows
Integration Requirements
A hospital billing system does not work in isolation. These are the integrations that matter most for 2026 compliance and operational efficiency:
Tally / Accounting
Export billing data to Tally or other accounting software for GL entries
GST IRP Portal
Direct API connection for e-invoice generation and IRN assignment
Payment Gateway
UPI, card, and net banking payments collected online for outpatient services
TPA Portals
Electronic claim submission to Star Health, United India, HDFC Ergo, and others
ABDM / NHA Portal
ABHA Health ID linking and PM-JAY claim submission via NHA portal
Lab and Pharmacy
LabQR and MedQRX send charges to billing automatically — zero manual transfer
How BillMedQR Handles All of This Automatically
BillMedQR by Akeera is the hospital billing module within the MedQR hospital operating system. Built specifically for Indian hospitals — ABDM compliant, GST-native, and integrated with every hospital department.
Why BillMedQR is different: Most hospital billing software automates invoicing. BillMedQR connects billing to every department in real time — OPDMedQR, IPDMedQR, LabQR, MedQRX, and the OT module. When a doctor prescribes, bills it instantly. When the lab completes a test, bills it instantly. When the pharmacist dispenses, bills it instantly. By the time a patient reaches discharge, the bill is already built.
| Function | What BillMedQR Does |
|---|---|
| GST calculation | Auto-applies correct rate to every service — room rent trigger, HSN-based pharmacy rates, cosmetic 18% flag |
| Charge capture | Pulls from OPD, IPD, pharmacy, lab, OT, nursing in real time — no manual department communication |
| TPA workflow | Pre-auth submission, interim claims, final claim, rejection tracking, resubmission — fully automated |
| PM-JAY billing | NHA package selection, pre-auth, and claim submission through NHA portal integration |
| E-invoicing | IRP API integration — IRN and QR code generated automatically for qualifying invoices |
| GST reports | GSTR-1 and GSTR-3B generated from billing data at month-end — no manual compilation |
| Payment settlement | Split billing across cash, UPI, insurance, and advance deposit in a single transaction |
| Revenue dashboard | Live revenue, pending TPA claims, outstanding dues, department collections — real time |