This article is written by Vanya Verma, from Alliance University, Bengaluru. This article talks about how inefficiently the pricing system is done in the Indian private hospitals, what were the different Acts and policies put forward for controlling this inefficient pricing system. Further, this article also discusses can a person be detained by a private hospital for non-payment of bills and lastly what measures can an individual take to avoid inflated and hefty bills.
Medical healthcare in our country is in a terrible state, with millions of people in India having little or no access to it. The high expense of healthcare in India prevents residents from receiving effective treatment, and in many cases, no treatment at all. India’s private healthcare system is exorbitantly priced. The lack of affordable alternatives forces hefty out-of-pocket costs to worsen the situation.
Inefficient pricing system
Even though health insurance programmes have been in place for over a decade, no government has taken the issue of pricing the service seriously. Most states set pricing for central government employees and pensioners that are either an average of market rates or based on the pricing of the central government health plan. However, because it is based on open tenders, the central government’s health plan has an inefficient pricing system.
When private agents supply services in a multi-payer context, the question of price becomes crucial. For example, in the United Kingdom and Thailand, most of the services are provided by government hospitals, where doctors and employees are salaried and budgets are fixed. However, in Japan, the providers are private doctors, the market is a monopoly, and reimbursements for services given are based on pricing set by the ministry of health in consultation with stakeholders, but are limited by financial ceilings set by the ministry of finance. As the sole purchaser of services, the government may control quality standards and rates while also enforcing strict penalties for overbilling.
The health sector in India is in a complex state, with market conditions ranging from highly competitive to oligopolistic. Earnings in the same hospital might range from service fees to reimbursements from a variety of insurers, including private commercial, employment state insurance schemes, central government health schemes, state government-sponsored insurance schemes, and so on. Prices for the same service may differ in such a case. As a result, pricing is not transparent and frequently arbitrary and unreasonable. It can also be influenced by the hospital’s financing options, which include cash, bank loans, donations, venture capital, and stock markets.
Rights of the patients to have access to hospital treatment bills
Patients have a fundamental right, according to the District Consumer Disputes Redressal Commission, to receive complete information from hospitals on medical expenses and treatment. Satrajit Sharma of Ludhiana filed a complaint with the commission on September 21 after Chandan Hospital in Phase 7, Mohali failed to provide him with bills for treatment and medication.
The Commission’s President, Sanjiv Dutt Sharma, stated in the orders posted on the commission’s website on September 24, 2020, that “As per the new Consumer Protection Act, 2019, rights of consumers are very carefully protected. We feel that it is a fundamental and natural right of the consumer to get bills and details of medical treatment. To our mind, a hospital can never be permitted to withhold the medical treatment details as well as bills from its consumer.”
Satrajit, who was treated for cardiac issues at Chandan Hospital in May 2017, paid the hospital Rs 1.50 lakh because it was not empanelled with the insurance firm that issued his policy.
Satrajit claimed in his lawsuit that after he filed a claim with his insurance carrier, the hospital failed to provide him with detailed bills, resulting in treatment costs not being covered for reimbursement. The commission directed that
The hospital must hand over medical bills, treatment charts, and receipts for medicines provided to the patient within 30 days of receiving a free certified copy of the order.
The order further said that “Since the hospital has unnecessarily caused harassment (to) Satrajit, who is a heart patient, it is ordered that the hospital will also compensate him with a consolidated amount of compensation to the tune of Rs 25,000 for mental harassment and litigation expenses.”
The Commission proceeded ex parte against Chandan Hospital since no one appeared on its behalf before the panel.
“A patient is the owner of his body and must have all records relevant to its functioning,” consumer rights campaigner Pankaj Chandgothia said in response to the judgement. The hospital has been compensated for its services and has no legal authority to keep the records.”
He explained that records of the treatment are required to inform doctors and hospitals about the patient’s condition in the event that he or she needs treatment again.
He further said that “Even PGIMER does not disclose complete data, private hospitals have made it a point not to provide detailed reports and bills to patients to avoid getting caught charging for services that were not provided. People must apply for and obtain information through the Right to Information.”
HC Arora, an advocate, agreed that everybody has the right to know what treatment they are receiving. “Most hospitals are afraid of litigation, but they must release all documents to ensure complete transparency,” he said.
Dr Rajesh Dhir, the Former President of the Indian Medical Association, believes that there should be no concealment about a patient’s medical history and that the patient should have total access to it. He went on to say that most hospitals provided patients with the necessary information.
Steps an individual can take to file a complaint if overcharged by the hospital
The National List of Essential Medicines 2015 has set prices for a number of medicines in order to make them more affordable to Indians. The Medical Devices Rules of 2017 introduced a slew of new restrictions aimed at keeping prices in check and making medical devices more accessible to Indian patients.
If you believe you have been overcharged by a hospital, you can file a complaint with the hospital as follows
- Keep all documentary documentation, such as bills and medications, with you at all times.
- Lodge an official complaint to the hospital’s management so that they can rectify the situation immediately.
- You can also submit a complaint with the government’s local medical officer.
- You can also call your insurance provider to inquire about the situation, as they are a party affected and would be eager to correct any examples of hospital overcharging.
- Write a letter or send an email to your State’s Office of the Controller of Legal Metrology.
- Contact the state or central health ministry, which will be able to help you with your problem.
- You can also write to the Indian Medical Council and the Indian Drug Council.
- Submit a complaint to your local consumer court.
- You can also contact a lawyer to file a case against the hospital if you want to take legal action against them.
- Since the Right to health is a fundamental right under Article 21, an individual can also file a writ petition under Article 226 and Article 32 of the Constitution of India.
Documents you will need to file a lawsuit against a hospital include
- Identity proof of the patient.
- Doctor’s prescription for the patient.
- Bills from the hospital.
- Proof of the product’s market price or MRP.
- Receipts signed by representatives from the hospital.
The petitioner in S. Jimraj Milton v. Union of India and Others seeks the court to intervene in the workings of the government and private hospitals and to regulate overcharging. In the order, W.P.Nos.7414 & 7456 OF 2020, the Court requested assistance from the government in answering issues about overcharging by the private hospitals.
The authorities have been given a deadline to respond to the various issues:
- Details of the total cost spent by patients for Coronavirus treatment in private hospitals,
- If there is a price cap on such charges, what is it?
- The existence of a redressal system for such overcharging by private hospitals, as well as the way in which it is implemented.
With the presence of facilities such as “e-governance” under the name of COVID India Seva, a digital platform that provides an interactive method and platform for direct communication between millions of people seeking information and posing questions and receiving a real-time response from the government.
What can a person do to reduce a family’s health care costs
Here are four easy ways for a man to save money on healthcare:
Do a cost comparison online
The Internet is a fantastic equaliser. You’d be astonished at how much information concerning healthcare expenses is already available online if you did a little research on Google or asked a question on Quora. Go ahead and Google, how much does an appendix procedure cost in India and see it yourself.
Before heading to the lab, find out how much a certain blood test or scan will cost. Look for their phone number on Google or their website, call their reception and inquire about their charges. You may save a lot of money by being proactive and comparing pricing across hospitals and testing centres.
Inquire about generic medications
There are generic and combination drugs available. Generic medicines are pharmaceuticals that are not protected by a patent and can be manufactured by any pharmaceutical business without the permission of the original inventor. Paracetamol, for example, is a generic name. Combination medicines contain two or more pharmaceuticals in a single pill and are protected by a patent, so they can only be sold by the maker.
Generic medications have the same active component as branded combination medications, are just as effective, and are far less expensive!
Know the central government’s price list for 1700 tests and procedures
Even though many common tests and hospital procedures may be found with a Google search, some may be difficult to locate. For its empanelled hospitals, the central government has produced a price list for approximately 1700 tests and treatments.
Link for a price-fixing list at- https://cghs.gov.in/index1.php?lang=1&level=1&sublinkid=6760&lid=3704.
Of course, the rates charged by the Central government are extremely modest, but they can be used as a reference. Treatment or testing in a private hospital or lab can cost 30-60% more than in a government hospital or lab, but if it’s double or triple the price, think twice.
Request a discount
What are you talking about? Is that something I’m capable of? Yes, indeed. It’s never a bad idea to inquire. “Could I speak with your manager about a discount?” – A simple question of 10 words that takes less than 5 seconds to ask can save you 10-15% on your overall bill. Whether it’s a hospital or a diagnostic centre, they want to keep their customer (patient/relative) pleased and will offer a modest discount in exchange for your loyalty. Tips for Bargaining – Know a competitor’s price, be nice, and congratulate them on their service. Appeal to the nobler reasons of the billing department and management employees, who are also humans.
Redressal mechanism in the public healthcare system
Response to the policy
Two sets of policy reactions were set up a few years ago that could be described as misbehaviour on part of private hospitals. The Haryana government issued notifications to Fortis Hospital in Gurugram in November after the hospital overcharged a dengue patient for 15 days of treatment in its intensive care unit. Around the same time, the Delhi government revoked Max Hospital’s licence in Shalimar Bagh for declaring a baby died when he was still alive. West Bengal and Karnataka also passed rules last year to address medical malpractice and overcharging.
However, due to a strike by 60,000 private doctors in Karnataka over some aspects of the Bill, the law has been limited to those covered by government-sponsored health insurance systems. It meant that those who were not covered by such plans were at the mercy of hospitals.
In 2000, Andhra Pradesh became one of the first states in India to enact the Clinical Establishments Act, which governs the registration and regulation of such healthcare facilities. In 2005, guidelines were established. Despite this, the Act has never been implemented because our pro-industry politicians believe that doing so would amount to promoting “inspector raj.”
As a result, there is no instant remedy for overcharging in the current legal system, except bringing a lawsuit in consumer court or approaching a civil court.
More importantly, there is an issue with the procedure. There is no universally accepted standard for determining what is a reasonable price. Comparisons with government hospitals are difficult because numerous cost components, such as land and buildings, are subsidised. In the absence of a price range based on approved technique, for example, the cost of a CT scan, can vary from hospital to hospital and be depending on factors such as utilisation levels, finance sources (interest-bearing loan as opposed to donation), and so on.
Regulation of prices
Private healthcare in India has come under fire in recent years due to exorbitant fees. In 2017, the Union health ministry launched an investigation into Jayant Singh’s daughter’s death. The issue sparked outrage and activity in the media, prompting the government to launch an investigation into private hospital billing practices.
Between 2017 and 2018, India’s drug pricing regulator, the National Pharmaceutical Pricing Authority, capped the prices of some medical equipment like cardiac stents and knee implants. PPE falls within the category of consumables and disposables when it comes to medical expenditures. These are not drugs or medical devices, but objects like gloves or syringes that are used in huge quantities during the care of a patient in a hospital and then discarded.
According to a 2018 study by the National Pharmaceutical Pricing Authority, the private sector profited by up to 1,737 per cent on some consumables billed to patients. For example, a gadget used in intravenous lines was purchased by hospitals for as little as Rs 5.77 but sold to clients for Rs 106, thus, at a 1,737 percent increase.
The government examined some private hospital bills and found that drugs, diagnostics, and devices accounted for 56 per cent of the total. It was revealed in March 2018, room rates and procedure costs, which are the more apparent parts of a charge, accounted for only 23% of these expenditures.
This investigation, according to the National Pharmaceutical Pricing Authority at the time, demonstrated that private healthcare billing of some items was “exorbitant and certainly a case of unethical profiteering in a failed market system.”
As documented in part one of this inquiry, the government of India has capped the pricing of some commodities needed by healthcare personnel, such as hand sanitisers and surgical masks, during the ongoing Covid-19 pandemic. N95 masks and PPE kits, on the other hand, are not subject to pricing controls.
The central government can regulate the cost of pharmaceuticals and consumables such as PPEs, sanitisers, gloves, and masks, according to Bhupendra Singh, former head of the National Pharmaceutical Pricing Authority.
However, as state governments are responsible for regulating private hospitals, they should use their clinical establishment statutes to set costs for diagnostics and general care in hospitals.
According to the court, treatment costs have only increased, making it unaffordable for the average person. The courts stated that even if a person survives Covid-19, they are frequently financially and economically devastated.
The Supreme Court ruled that states must make enough accommodations in government hospitals to treat Covid-19 patients or cap charges in private facilities, stating that the “right to health included affordable care.”
The court’s order came in response to a suo moto case examining efforts to restrict COVID-19, the judges described this challenge as “fighting a world war” against a disease, while also emphasising that those who break protocols should be dealt with harshly. The bench, led by Justice Ashok Bhushan, stated that it is the State’s responsibility to provide for inexpensive treatment and provisions in hospitals that they operate and govern. When they fail to meet expectations, state governments should use them under pertinent law.
“Therefore, either more provisions are to be made by the state government and local administration, or there shall be (a) cap on the fees charged by private hospitals, which can be in the exercise of the powers under the Disaster Management Act,” the bench, which also included Justices RS Reddy and MR Shah, stated.
Can hospitals hold patients “hostage” over unpaid bills
Patients are frequently held “hostage” by healthcare institutions/hospitals long after they should be medically discharged, with armed guards, sealed doors, and even chains used to extort money for unpaid bills. Even death does not ensure release, as morgues detain bodies for unpaid hospital bills.
Wrongful confinement, as defined under Section 340 of the Indian Penal Code, 1860, is the act of confining a person in a hospital without legitimate grounds. The burden of proof is initially on the prisoner to establish that he was imprisoned, but after that is proved, the burden shifts to the detaining hospital authorities to establish that they had valid grounds for imprisonment.
The High Court of Delhi in Devesh Singh Chauhan v. State & Ors has held:
“Merely because the cities of the hospital treating the patient are outstanding that certainly cannot be the reason to withhold the release of the patient” and further commented that “we deprecate this practice”.
The right to personal liberty is guaranteed by Article 21 of the Indian Constitution, which also prohibits inhuman treatment. In Consumer Education and Research Centre v. Union of India, the Supreme Court of India held that Article 21 read along with the relevant directive principles guaranteed under Articles 39(e), 41, and 43 demonstrates that the right to health and medical care is a fundamental right that makes a person’s life meaningful and dignified.
In Paschim Banga Khet Mazdoor Samiti v. State of West Bengal, the Supreme Court held that government hospitals and the medical officers who work there have a duty to provide medical assistance to save lives. Failure by a government hospital to give timely medical treatment to a person in need of such treatment is a violation of Article 21’s right to life. Hospitals are unable to refuse treatment on the basis that the victim is unable to pay the price or cover medical expenses. Due to financial restrictions, the state cannot escape its constitutional commitment to provide basic medical care to individuals.
Despite the rights guaranteed by the Indian Constitution, hospitals frequently keep patients due to unpaid fees or the presence of a deceased person. This technique is not only illegal, but it is also inhumane and torturous for both the individual detained and their relatives. Because public health is a state topic under the Constitution’s List-II, there is an urgent need for a proper law to be enacted by the states to put an end to hospitals’ barbaric practises.
A balance must be maintained between patients who are unable to pay their bills or who have been overcharged by the hospital, and the dilemma that hospitals face when patients threaten them and go so far as to vandalise the facility and abuse the professionals who work there.
The High Court of Bombay in Sanjay S Prajapati v. the State of Maharashtra, while considering a PIL, stated that
“...this court has already held that detention of patients by hospitals for non-payment of bills/charges will amount to wrongful confinement. Therefore the State Government will have to provide adequate grievance redressal mechanisms so that relatives of the patient can approach appropriate nominated authority which can take immediate action within the four corners of law including the action of setting the criminal law in motion.”
In 2018, the Ministry of Health and Family Welfare issued a ‘Charter of Patient Rights,’ which outlined the 17 basic rights of patients. The National Human Rights Commission (NHRC) drew inspiration for this Draft Charter from a variety of national, international, and constitutional obligations, such as the Indian Constitution, the Indian Medical Council (Professional Conduct, Etiquette, and Ethics) Regulations 2002, the Consumer Protection Act 1986, the Drugs and Cosmetics Act 1940, and the Clinical Establishment Act 2010.
In its present form, the draft charter aims to protect against hospital malpractices by granting certain rights to the patients. particularly the right to be discharged. It states:
“A patient has the right to be discharged and cannot be detained in a hospital, on procedural grounds such as [a] dispute in payment of hospital charges. Similarly, caretakers have the right to the dead body of a patient who had been treated in a hospital, and the dead body cannot be detailed on procedural grounds, including non-payment/dispute regarding payment of hospital charges against wishes of the caretakers”.
Other important rights enshrined in the draft charter include the right to adequate and relevant information about illness and treatment, the right to unrestricted emergency medical care, the right to informed consent before any test or treatment, the right to human dignity and privacy, the right to a second opinion, the right to rate transparency, and the right to non-discrimination.
It should be noted that this draft charter has not yet been ratified, and it will remain a toothless tiger unless it is transformed into law with repercussions in the event of non-compliance.
A comprehensive piece of legislation that directly addresses the issue of hospital negligence is urgently needed. Simultaneously, a balance must be established between doctors’ and hospitals’ rights by establishing a system for recovering their legal dues.
Governments must pay close attention to these essential elements of the “strategic purchase” of services strategy. The mere announcement of insurance coverage will not help achieve the goal of lowering poverty and out-of-pocket spending until reforms and price-fixing protocols and mechanisms are implemented. Similarly, providers (hospitals and doctors) must be regulated, and patient grievance mechanisms must be established. It’s high time to prioritise people’s health over political expediency and false rhetoric.
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