Kerala High Court Permits New Govt Order Fixing Room Rent At Private Hospitals To Operate For 6 Weeks

A Division Bench of the Kerala High Court decided to allow the operation of the Government Order dated 7th July, 2021 for a period of six weeks to evaluate the efficiency of the proposed scheme regarding fixing of room rents by private hospitals.

Justices Devan Ramachandran and Kauser Edappagath pointed that the present Order appeared to have come out after several deliberations from all stakeholders, and therefore deserved a trial run.

The GO dated 7th July categorized private hospital rooms into 5 broad classifications and explained the methodology accepted by the State Health Agency at arriving at the different rates chargeable for various rooms in private hospitals. The Court had earlier suspended the operation of a previous Government Order dated 16th June 2021 which permitted private hospitals to fix the room rent for Covid-19 patients.

With the new Order, although private hospitals still have the discretion to fix rates, there has been a cap fixed that cannot be exceeded under any circumstance. Since a maximum price was fixed, the State speculated that it would act as a regulation among the private hospitals.

The Order also detailed the inclusions and exclusions of the rates mentioned for hospital rooms and had provisions regulating Insurance policies as well.

A review petition was filed before the Court on Thursday with supplementary submissions on behalf of the Kerala Private Hospitals Association. Although they had serious legal reservations with respect to the GO dated 7th July, it was submitted that at this stage, rather than challenging portions of the new GO that appear to be illegal, a way forward in the spirit of cooperation with all stakeholders was more appropriate.

Advocate S Kannan represented the State in the matter. It was submitted that the new GO is based on multiple stakeholder consultations with the private hospitals as well as health agencies of the government.

Senior Counsel Shyam Divan pointed out minor objections regarding the recent Order. However, it was submitted that the package may be allowed to function for a period of 6 weeks or so to see how effective it is. Grievances from the public and other concerned parties can be collected in the meanwhile, he submitted.

This submission of the Counsel was found to be 'gratifying' by the Court. 

The Division Bench upon hearing both the parties also observed as such:

"The learned Senior Counsel Shyam Divan expressed his client's satisfaction with the efforts taken by the government. Minor objections were pointed out, however, he was willing to let the Order function for 6 weeks."

Moreover, the Court noted that the rates fixed by the government follow certain norms that are universally accepted and that the Court was therefore not competent to sit in judgment regarding such matters.  

Hence, the Government Order dated 16th June 2021 was set aside. The Bench also clarified that the review petition has not been disposed of, and will be heard again after 6 weeks to examine the feasibility of the new system. 

The matter has been accordingly listed for 26th August.

Case Title: Kerala Private Hospitals Association v. Adv. Sabu P Joseph & Ors.

Click Here to Read Government Order