Clinical Establishment rule: Rates range for medical procedures needed to curb excessive healthcare charges, Centre tells SC

New Delhi: Defending a provision that allows the government to prescribe a range of charges for medical procedures across clinical establishments, the Centre, in an affidavit before the Supreme Court, said that the rule would help standardise healthcare rates and protect patients from excessive and arbitrary charges.

The submission is related to Rule 9(ii) of the Clinical Establishments (Central Government) Rules, 2012, which 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.

In the affidavit, the Ministry of Health and Family Welfare said the provision is intended to prevent inconsistent and exorbitant pricing, price gouging, excessive charging and arbitrary inflation.

"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 gouging, excessive charging and arbitrary inflation in prices", the affidavit mentioned, as reported by Live Law. 

The Centre's affidavit was filed in a petition filed by the 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 government, however, clarified that the rule does not seek to impose a single uniform price on all clinical establishments. Instead, it provides for a range within which hospitals and other healthcare facilities can decide their charges based on factors such as infrastructure, quality of services and patient demographics. According to the affidavit, this balances affordability for patients with the financial sustainability of healthcare providers.

The Centre also said that 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.

The Centre further 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.

More States yet to submit proposals

Despite consultations held over the past two years, the Centre said most States and Union Territories have not yet submitted concrete proposals for determining the range of rates.

The Supreme Court had directed the Union Health Secretary on February 27, 2024, to hold consultations with States and UTs and prepare a concrete proposal for implementing Rule 9(ii).

Following this, the Centre held a meeting with States and UTs on March 19, 2024, asking them to work out standard costs for medical procedures and services.

A costing template was later circulated on March 28, 2024, taking into account factors such as location, type of treatment and the qualification and experience of healthcare professionals.

After another meeting with States and UTs on July 31, 2025, a stakeholder workshop was held on November 11, 2025. Four zonal meetings followed on January 23, January 28, February 4 and February 11, 2026, followed by a Chintan Shivir on March 12, 2026.

The Centre has informed the Supreme Court that despite these efforts, no concrete proposals have been received from the States or UTs for determining the range of rates.

The Centre said determining a common rate range is difficult because of India's geographical and socio-economic diversity. Differences in infrastructure and availability of qualified manpower make it difficult to prescribe a uniform range. States have also expressed concerns that rate fixation could affect medical research and development and private-sector healthcare delivery, the affidavit mentioned. 

The affidavit noted that the Clinical Establishments Act has been adopted in 19 States and Union Territories, while 17 States have their own laws regulating clinical establishments.

It notes that almost all States with their own legislation require establishments to display rates, but their laws do not provide for determination of a range of rates. Both categories of States have expressed willingness to ensure display of rates but have continued to raise concerns about determining a rate range, the affidavit stated, adds LiveLaw.

Government rejects Article 19(1)(g) challenge

The Centre has also defended Rule 9(ii) against the argument that it violates the right to practise a profession or carry on a trade or business under Article 19(1)(g) of the Constitution.

It argued 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 also rejected the argument that the provision violates Articles 14 and 21. It contended that the rule could help ensure affordable healthcare and allow patients to choose clinical establishments based on quality rather than price alone.

It said 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 Centre has also argued that regulating prices is not new under Indian law. It referred to the Supreme Court’s 1987 judgment in Union of India v. Cynamide India Ltd., 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 the statutory framework of the Clinical Establishments (Registration and Regulation) Act, 2010. Section 12 requires every clinical establishment, for registration and continuation, to fulfil conditions relating to minimum standards of facilities and services, minimum requirements of personnel, maintenance of records and reporting, and “such other conditions as may be prescribed”. The Centre contends that the Rule was framed under this power and advances its objective of improving public health under Article 47.

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