Supreme Court Issues Notice On Plea Challenging Rule Fixing Rates Of Medical Services & Procedures

The Supreme Court on Tuesday (September 17) issued notice in Public Interest Litigation (PIL) challenging the rule regarding the fixation of rates for procedures and services by clinical establishments. 

The plea has been filed by the Association of Healthcare Providers (India) challenging the constitutionality of Rule 9(ii) of Clinical Establishments (Central Government) Rules, 2012 as ultra vires the parent Act - The Clinical Establishment Act, 2010. 

"The surreptitious manner in which a price control has been sought to be introduced by Government through the Rule(s) is not sanctioned by the Parliament or by any State Legislatures. It is established principle of law that rules cannot go and travel beyond the scope of the Act/ legislation itself," the plea stated.

The bench led by CJI DY Chandrachud comprising Justices JB Pardiwala and Manoj Misra issued notice in the matter. 

Rule 9(ii) under the "Other conditions for registration and continuation of clinical establishments" states : 

"The clinical establishments shall charge the rates for each type of procedures and services within the range of rates determined and issued by the Central Government from time to time, in consultation with the State Governments" 

The petitioner contends that the increasing technological advancements in medical procedures make it difficult to stick to fixed rates considering the increased investments into the procedures and implants. The price ceilings may therefore become an obstacle in adopting medical advancements for the clinical establishments.

"The complexity of specifying procedural prices arises due to the vast array of choices available, including various implants and procedural methods such as robotics, laser, and navigation systems. Moreover, there is continual innovation in medical techniques, making it challenging to establish a fixed price range. Imposing price specifications could hinder the adoption of new and innovative treatment methods in the country, potentially resulting in a loss of capital and a brain drain of medical professionals. This could significantly impede the advancement of healthcare services capabilities in India."

Additionally, the plea states that the Parent Act came into effect on 01.03.2012 for the States of Arunachal Pradesh, Himachal Pradesh, Mizoram, and Sikkim and Union Territories, namely, Puducherry, Dadra & Nagar Haveli and Daman & Diu, Andaman & Nicobar Islands, Chandigarh, Lakshadweep, Jammu & Kashmir, vide gazette notification dated 28.02.2012. Subsequently, 8 other States, namely, Bihar, Jharkhand, Uttarakhand, Rajasthan, Uttar Pradesh, Assam, Haryana and Telangana have adopted the Act.

Section 56 of the Act states that "The provisions of this Act shall not apply to the States in which the enactments specified in the Schedule are applicable", unless such states adopt the Act under clause (1) of article 252 of the Constitution.

"Therefore, it is abundantly clear that the Parent Act is not applicable throughout the country but is limited to States that have adopted the and to Union Territories." 

The Parent Act however remains silent on about the need to regulate the pricing of medical services. 

"Notably, the Parent Act does not address or concern itself with the pricing of medical services in accordance with these standards."

Therefore, it is contended that Rule 9(ii) by mandating the fixation of prices of the medical services 'oversteps' the Parent Act.  

The petition was filed with the assistance of AOR Vagisha Kochar

It may be noted that another bench of the Supreme Court is considering a petition seeking the implementation of the very same rule.   Though the Rule was framed 12 year ago, it is yet to be enforced. In February, a bench comprising Justices BR Gavai and Sandeep Mehta had rebuked the Centre for not enforcing this rule and warned that the Court would fix the rates. The Court then directed the direct the Secretary, Department of Health, Union of India to hold a meeting with his counterparts in the State Governments/Union Territories and come with a concrete proposal.

Case Details : ASSOCIATION OF HEALTHCARE PROVIDERS (INDIA) vs. UNION OF INDIA| W.P.(C) No. 000573 / 2024