Apex Court Issues Notice In Plea By Association Of Healthcare Providers Challenging Price Control Under Clinical Establishments Rules

The Supreme Court today issued notice in a Writ Petition filed by the Association of Healthcare Providers (India), a non-profit organization representing the healthcare industry, challenging the constitutionality of Rule 9(ii) of the Clinical Establishments (Central Government) Rules, 2012.

The Bench of Chief Justice DY Chandrachud, Justice JB Pardiwala, and Justice Manoj Misra issued notice in the case after hearing Senior Advocate Malvika Trivedi for the petitioner and tagged it with WP(C) 214/2024. 

"Issue notice and tag along with Writ Petition (C) No. 214/2024," the Bench ordered. 

The petition filed through AoR Vagisha Kochar argues that the rule, which allows the Central Government to prescribe rates for medical procedures, exceeds the legislative authority granted by the Clinical Establishments (Registration and Regulation) Act, 2010, and is unconstitutional.

The petition contends that the rule violates Articles 14, 19(1)(g), and 21 of the Indian Constitution, which protect the rights to equality, freedom of trade, and the right to life. The petitioner argues that the Act's primary purpose is to regulate the quality of healthcare services through minimum standards for infrastructure, equipment, and staffing, and does not authorize price control over medical procedures.

According to the petition, the Act does not apply uniformly across India but only to certain states and union territories that have adopted it under Article 252(1) of the Constitution. The petition challenges the government's attempt to introduce price control for medical services, claiming that it could stifle innovation in healthcare, discourage the adoption of new treatment technologies, and lead to financial losses for clinical establishments.

"Further, Rule 9 sub-rule (2) of the Act provides for the Central Government to prescribed range of rates for each type of procedure(s).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 petition states. 

The petition also asserts that regulating prices for medical services without considering the complexities involved, such as varying procedural methods, equipment, and the medical professional's expertise, is arbitrary and could severely impact the economic viability of private healthcare institutions. It argues that price standardization could result in the closure of many clinical establishments, negatively affecting public health. The association has called for a balance between public health objectives and the financial sustainability of healthcare providers, arguing that price control should not overshadow the quality of medical care, which is the core goal of the Act.

Cause Title: Association of Healthcare Providers (India) v. Union of India [W.P.(C) No. 573/2024, Diary No. 40301/2024]