Government of Karnataka, to
regulate/prescribe the rates chargeable by private medical establishments (and
professionals) for services and procedures performed by them
Dr
K K Aggarwal, National President IMA
The Government of Karnataka
is planning to introduce a Bill (January 2017?) for price
control in the private healthcare sector. Prices will be fixed for all medical
procedures including that for the patientsin the
private wards.
The government is unable to
provide care to the citizens through its networks and it is the private healthcare
providers, who are providing safe and quality healthcare to around 70 percent
of the citizens. If this happens it will destroy the healthcare delivery system
and the citizens of our state will have no access to the state of the art
technology. If the GoK succeeds, other states will follow suit.
Current Position
Clinical Establishment Act: rule 9 (2) The clinical
establishment shall charge the rates for each type of procedure and services
within the range of rated determined and issued by the central government from
time to time in consultation with the state government
Recommendations of inter-ministerial
committee
The committee recommends that the position of the
rule 9 (2) of the CE rules can be considered to be changed to the extent that
central government should specify the list of procedures and costing templates
while actual determination of the range of rates could be left to the state
governments who can take into consideration the relevant facts while deciding
upon the range of rates for their respective states in consultation with
relevant states holders including the Indian Medical Association.
IMA Position
1.
Challenge
the rule 9 as ultra vires as there is no provision of this in the parent act.
2.
No rates
can be decided without involvement of Indian Medical Association.
3.
IMA is
launching IMA costing department to decide templates and range of costing.
4.
Government
has powers to regulate the rates under municipal acts, only in emergency and
national calamities, not otherwise.
Legal Position taken by AHPI and CAHO
1.
The
anticipated governmental action may arise in one of two ways—(a) legislative
action, through the enactment of a fresh law, or the amendment of existing laws
by the State Legislature; or (b) executive/administrative action, through the
issuance of Rules/Regulations, or notifications/circulars, etc. under the
existing laws or otherwise.
2.
Legislative
action by the State is subject to challenge on broadly the following
parameters—(a) legislative incompetence [Whether the State Legislature has the
right to legislate on that subject], and (b) other constitutional grounds,
including violation of fundamental rights [right to equality and right to trade
and profession etc.]. Administrative actions are subject to the same constitutional
parameters, but can additionally be challenged on grounds that they do not
derive authority from any statutory framework, or fall foul of the statutory
framework from which they derive.
3.
In
particular, any legislative or administrative action to control or regulate
rates applicable in private medical establishments (or charged by
professionals) would predominantly be open to challenge on grounds that (a) the
body taking action does not have the competence to do so, and (b) violation of
the fundamental rights of medical practitioners/establishments, or other
constitutional provisions.
4.
In the
absence of any details of the nature and mechanism of the anticipated action in
Karnataka, the present Note restricts itself to a broad discussion on the
feasibility of a challenge on grounds of violation of the right to practice any
profession or carry on any occupation, trade or business, under Article
19(1)(g) read with Article 19(6) of the Constitution. The question
centers around the power of the Government to control price of private
enterprise.
5.
At
present, the statutory framework for private medical practice in Karnataka
consists of (a) the Karnataka Medical Registration Act, 1961 and (b) the
Karnataka Private Medical Establishments Act, 2007 (and Rules framed
thereunder). These laws are enacted for (a) the registration of medical
professionals and establishments, and (b) for regulation of the technical and
professional standards to be followed in medical practice.
6.
The
existing framework in Karnataka requires private medical establishments and
professionals to (a) conspicuously publish their charges, and (b) adhere to
them. There is no restriction in the present framework on the quantum of
rates/fee that may be charged by private establishments/professionals [See:
Section 10, Karnataka Private Medical Establishments Act, 2007, and Section 15,
Karnataka Medical Registration Act, 1961 read with the Code of Medical Ethics
issued by the Medical Council of India in 2002].
7.
However, measures
to regulate the quantum of rates chargeable by medical
establishments/professionals do exist in territories outside the state of
Karnataka. For example, the Clinical Establishments (Central
Government) Rules, 2012, framed under the Clinical Establishments (Registration
and Regulation) Act, 2010, mandate that all registered establishments (which
includes individual doctors) in the territories to which the Act applies, shall
charge for procedures/services within the range of rates determined and issued
by the Central Government from time to time, in consultation with the State
Governments [See: Rule 9(ii), Clinical Establishments (Central Government)
Rules, 2012]. It is pertinent that the Act itself does not contain any
provision related to the regulation of rates (and may therefore be subject to
challenge on grounds of “excessive delegation”).
8.
Under the
Clinical Establishments (Registration and Regulation) Act, 2010, a National
Council has been set up to oversee its implementation. A Sub-Committee to give
recommendations on the range of charges was also formed, and appears to have
submitted its report, but it is presently unclear what the status of
implementation of this report is.
9.
It is
notable however that there is precedent to suggest that the State has no
ability to introduce price control measures through Rules when the parent Act
does not provide for the same. Notifications/Rules have been struck down in the
past on grounds of "excessive delegation”. Whilst the constitutional
validity of the Clinical Establishments (Registration and Regulation) Act, 2010
has been upheld by the Delhi High Court, the said Act and the Rules do not
appear to have been tested before any court on the ground of excessive
delegation (or even otherwise on the constitutionality of imposing rate regulation
on private medical establishments/professionals).
10.
It is
worth cautioning that while there is no legal precedent specific to price
regulation of medical establishments/professions, challenges to price/fee
regulation in other fields have not met with considerable success in the
past. The High Courts and Supreme Court have time and again upheld the
competence of the Centre and States to regulate rates/fee as a “reasonable
restriction” under Article 19(6) of the Constitution, if the same is found to
be in greater public interest.
11.
For
example, the Supreme Court has categorically outlawed “commercialization” in
the field of education, whilst holding the same to be predominantly
“charitable” in nature. It has specifically prohibited the charging of “capitation
fees” for admission into any educational institution (including
private unaided educational institutions) and has upheld
legislative/administrative action to fix and regulate the fees that may be
charged. Such regulation has been held to be a “reasonable restriction”
in “public interest” under Article 19(6) of the Constitution. Landmark
judgments occupying this field include:
a.
TMA Pai
Foundation v. State of Karnataka
b. Islamic Academy v. State of Karnataka
c.
PA Inamdar
v. State of Maharashtra
d. Modern Dental College
v. State of Madhya Pradesh
12.
By way of
another example, in Deepak Theatre v. State of Punjab
“Witnessing a motion picture
has become an amusement to every person; a reliever to the weary and fatigue; a
reveler to the pleasure seeker; an importer of education and enlightenment
enlivening to news and current events; disseminator of scientific knowledge;
perpetrator of cultural and spiritual heritage, to the teeming illiterate
majority of population. Thus, cinemas have become tools to promote welfare of
the people to secure and protect as effectively as it may a social order as per
directives of the State Policy enjoined under Article 38 of the
Constitution. Mass media, through motion picture has thus become the vehicle of
coverage to disseminate cultural heritage, knowledge, etc. The passage of time
made manifest this growing imperative and the consequential need to provide
easy access to all sections of the society to seek admission into theatre as
per his paying capacity. Though the right to fix rates of admission is a
business incident, the appellant having created an interest in the general
public therein, it has become necessary for the State to step in and regulate
the activity of fixation of maximum rates of admission to different classes, as
a welfare weal. Thereby
fixation of rates of admission became a legitimate ancillary or incidental
power in furtherance of the regulation under the Act.”
13.
It is
notable that the governmental responsibility to improve public health finds
place in the Directive Principles of State Policy set out in the Constitution
(Article 47). It is furthermore notable that the Supreme Court/High
Courts have upheld the right to health as a part of the right to life under
Article 21 of the Constitution, and have observed that improvement to public
health is one of the “primary duties” of the State. There is also language in
the Code of Ethics framed by MCI as well as the Oath taken by all medical
professionals that will go a long way in establishing the public nature and
interest in these services. [See: Mukhtiar Chand v. State of Punjab (1998) 7
SCC 79, Rajasthan Pradesh VS Sardarshahar v. Union of India (2010) 12 SCC 609,
Delhi Medical Association v. Principal Secretary, Health 229 (2016) DLT 322].
14.
We should
challenge the Rules framed under the Clinical Establishments Act, 2010, given
the availability of other stronger legal grounds (including “excessive
delegation”) for getting the provision related to rate regulation/price control
struck off as ultra vires the parent Act. This will help us get audience in
court, and will allow us to raise challenge based on Article 19(1)(g) of the
Constitution as well. If and when the Karnataka legislation is passed, it may
be easier to club the challenge (based on the language used in the
statute/notification etc.) to this.
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