INTRODUCTION: Ayushman Bharat Pradhan Mantri Jan Aarogya Yojana (AB PM-JAY) has enabled the Government of India to become a strategic purchaser of health care services from private providers. To generate base cost evidence for evidence-based policymaking the Costing of Health Services in India (CHSI) study was commissioned in 2018 for the price setting of health benefit packages. This paper reports the findings of a process evaluation of the cost data collection in the private hospitals. METHODS: The process evaluation of health system costing in private hospitals was an exploratory survey with mixed methods (quantitative and qualitative). We used three approaches-an online survey using a semi-structured questionnaire, in-depth interviews, and a review of monitoring data. The process of data collection was assessed in terms of time taken for different aspects, resources used, level and nature of difficulty encountered, challenges and solutions. RESULTS: The mean time taken for data collection in a private hospital was 9.31 (± 1.0) person months including time for obtaining permissions, actual data collection and entry, and addressing queries for data completeness and quality. The longest time was taken to collect data on human resources (30%), while it took the least time for collecting information on building and space (5%). On a scale of 1 (lowest) to 10 (highest) difficulty levels, the data on human resources was the most difficult to collect. This included data on salaries (8), time allocation (5.5) and leaves (5). DISCUSSION: Cost data from private hospitals is crucial for mixed health systems. Developing formal mechanisms of cost accounting data and data sharing as pre-requisites for empanelment under a national insurance scheme can significantly ease the process of cost data collection.