Centre Defends Clinical Establishment Rule In Supreme Court, Says It Curbs Excessive Pricing Of Medical Services

The Centre has defended the validity of Rule 9(ii) of the Clinical Establishments (Central Government) Rules, 2012 before the Supreme Court, contending that prescribing the range of rates would standardise charges across clinical establishments, preventing inconsistent and exorbitant pricing, price gouging, excessive charging and arbitrary inflation, and protecting patients from exploitation.Rule 9(ii) requires clinical establishments to charge for each type of procedure and service within the range of rates determined and issued by the Central Government in consultation with State Governments. Rule 9(i) provides that establishments have to display the rates charged for their services and facilities in a conspicuous place in the local as well as English language."Rule 9(ii) Of the Rules, by prescribing a range of rates for medical procedures, intends to standardise the rates across different clinical establishments so that there is no scope for inconsistent and exorbitant prices being charged by the healthcare providers and that the patients are not vulnerable to exploitation. Standardised rates help in controlling healthcare Costs by preventing price gauging, excessive charging and arbitrary inflation in prices", an affidavit filed by the Ministor of Health and Family Welfare states.The Centre has also informed the Court that most States and Union Territories have still not been able to determine the range of rates for medical procedures and services under the provision despite consultations over the past two years.The Centre's affidavit was filed in a petition filed by All India Ophthalmological Society challenging Rule 9(ii) as well as connected proceedings concerning implementation of the same provision. In April 2024, the Supreme Court had questioned how the Government could prescribe uniform rates for medical services. In August 2025, the Court clarified that the 2012 Rules had not been stayed and continued to operate as applicable law.The Centre has said that the Rule does not prescribe a uniform price but only a range, within which establishments can adjust charges based on factors such as infrastructure, quality of service and patient demographics. According to the affidavit, this balances affordability for patients with the financial sustainability of healthcare providers. The Centre has submitted that the rates would not be fixed arbitrarily, but through a consultative process by the National Council for Clinical Establishments, which includes members from different stakeholders and is statutorily required to receive data from State Councils. The Centre has said that standardised rates would make it easier for insurers to calculate premiums and reimbursements, improve predictability in healthcare financing, reduce administrative burdens, encourage providers to compete on quality rather than only price, and help regulators monitor compliance with pricing rules.On challenge on the ground of violation of Article 19(1)(g), the Centre has contended that clinical establishments cannot be placed on the same footing as ordinary trade or business establishments. It has argued that while their financial sustainability is relevant, the State can examine whether their returns are reasonable and whether charges affect affordability. The affidavit contends that regulation of charges is a reasonable restriction in the interest of the general public under Article 19(6). The Centre has contended that the Rule does not violate Article 21 of the Constitution as a range of rates and standardised service quality could help ensure affordable healthcare and allow patients to choose clinical establishments based on quality rather than price alone. It contends that the provision seeks to ensure that healthcare prices are neither so high that they become inaccessible nor so low that providers have no incentive to improve and grow.“It is submitted that the challenge to this provision as being in violation of Article 14, and 21 Of the Constitution is ill-founded and baseless. The provision under challenge has been enacted in pursuance Of the State's positive obligation under Article 47 to improve public health…Rule 9(ii) helps in standardising the prices for medical procedures and helps to achieve equal access of healthcare services to all, irrespective of their socio-economic background. Therefore, the said Rule only furthers right to health guaranteed under Article 21. Any measure which advances Directive principles of State policy is imbued with public interest”, the affidavit further states.The affidavit further argues that price regulation is not alien to Indian law. It relies on the Supreme Court's judgment in Union of India v. Cynamide India Ltd., (1987) 2 SCC 720, which upheld the concept of price fixation in the public interest. The Centre also refers to price controls in the pharmaceutical sector and the Maximum Retail Price regime under the Legal Metrology framework.The Centre argues that Rule 9(ii) falls within...

Centre Defends Clinical Establishment Rule In Supreme Court, Says It Curbs Excessive Pricing Of Medical Services

Amisha Shrivastava

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Amisha Shrivastava

Centre Defends Clinical Establishment Rule In Supreme Court, Says It Curbs Excessive Pricing Of Medical Services

Amisha Shrivastava

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Amisha Shrivastava

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