Supreme Court Backs Private Hospital Rate Caps

New Delhi: Will private hospitals across India finally face a check on arbitrary treatment charges? The Centre has told the Supreme Court that a rule requiring private hospitals to charge patients within the maximum and minimum treatment rates prescribed by the government is constitutionally valid.

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In an affidavit filed before the Supreme Court, the Union Ministry of Health and Family Welfare stated that private hospitals are required to follow treatment rates fixed by the Central Government in consultation with the states. However, the process of finalising these rate limits has not yet been completed because several states have not reached a consensus on the issue.

The Centre has strongly defended Rule 9(ii) of the Clinical Establishments (Central Government) Rules, 2012, which is currently under challenge before the Supreme Court.

What is the petitioners’ demand?

According to a report by Bar and Bench, the All India Ophthalmological Society has challenged Rule 9(ii) of the Clinical Establishments (Central Government) Rules, 2012.

The petitioners have argued that it would be impractical to expect specialist doctors providing advanced medical services in metropolitan cities to charge the same fees as doctors operating in smaller towns or rural areas.

They have questioned the uniform application of treatment rates, arguing that healthcare costs and the availability of specialised medical services can vary significantly between different regions.

Supreme Court had sought Centre’s response

The petition was first heard in April 2024 by a bench comprising Justice Sudhanshu Dhulia and Justice Prasanna B. Varale.

During the hearing, the bench observed that private hospitals are often provided land at concessional rates subject to conditions such as reserving beds for economically weaker patients. The court also raised concerns over whether such hospitals are complying with these obligations.

The Supreme Court subsequently directed the Centre to file its response on the issue.

Hospitals must charge within prescribed rate limits

In its affidavit, the Union Ministry of Health and Family Welfare has maintained that hospitals must charge patients only within the treatment-rate limits prescribed by the Central Government in consultation with the states.

The Centre has also defended Rule 9(ii) by linking it to the government’s constitutional responsibility to improve public health under Article 47 of the Constitution.

According to the Centre, regulating treatment charges is part of the broader objective of ensuring accessible and affordable healthcare for citizens.

Why was the Clinical Establishments Act introduced?

The Centre has argued that the Clinical Establishments Act was introduced because the private healthcare sector remained largely unregulated.

The government has also rejected the petitioners’ argument that imposing similar treatment rates on healthcare providers operating under different circumstances violates Article 14, which guarantees equality before the law.

The Centre’s position is that regulating private healthcare charges is aimed at protecting patients and ensuring greater transparency in the healthcare system.

The Supreme Court’s consideration of the issue could have significant implications for private hospitals, specialist doctors and patients across the country. If treatment-rate limits are effectively implemented, private healthcare providers may face greater scrutiny over the charges they levy for medical services.

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