Abstract
This study assessed the characteristics of beneficiaries of a government-led policy of exemption for payment being provided in a regional hospital in Nepal. In January and February 2012, 9547 patients sought services at the out-patient clinic, the majority (83%) of whom were from the same district although this was a referral hospital for 15 districts. Only 10.8% received exemption from payment; 66% of the individuals aged >60 years and eligible for exemption were missed. These shortcomings highlight intrinsic weaknesses in the current implementing mechanisms for payment exemption, which may not be providing financial protection. This hampers efforts towards achieving universal health coverage.