The Centre has told the Supreme Court that a rule requiring private hospitals to charge patients within a government-fixed price range is constitutionally valid. However, it has also admitted that the price range has not yet been finalised because the States have not reached a consensus.

The Union Ministry of Health and Family Welfare made the submission in a counter affidavit filed in response to a petition by the All India Ophthalmological Society. The petition challenges Rule 9(ii) of the Clinical Establishments (Central Government) Rules, 2012.

The rule requires private hospitals to charge patients within a range of rates to be fixed by the Centre in consultation with the States.

The All India Ophthalmological Society has argued that the same pricing range cannot be applied across the country. According to the petitioner, doctors and specialists working in metropolitan cities have much higher costs compared to those practising in smaller towns and remote areas.

The case first came before the Supreme Court in April 2024.

A Bench of Justices Sudhanshu Dhulia and Prasanna B Varale had then raised concerns about private hospitals that receive land from governments at subsidised rates but allegedly fail to meet conditions such as reserving beds for poorer patients. The Court had sought the Centre's response on the issue.

In its affidavit, the Centre defended the rule by referring to Article 47 of the Constitution, which requires the State to work towards improving public health.

The government also said that the Clinical Establishments Act, 2010 was introduced because private healthcare in India had remained “largely unregulated and uncontrolled.”

The Centre rejected the argument that the rule violates Article 14, which guarantees equality before the law. It clarified that the rule does not require every hospital to charge exactly the same amount. Instead, hospitals would be allowed to set their own charges within the government-approved range, depending on factors such as infrastructure and quality of services.

The government also defended the rule against the challenge under Article 19(1)(g), which protects the right to carry on a profession or business. It argued that medical services cannot be treated like an ordinary commercial activity because they involve a strong public interest.

The Centre said reasonable restrictions on medical services are therefore permissible under Article 19(6). It also referred to price-control measures in sectors such as medicines and cinema tickets, which have previously been upheld by the Supreme Court.

On the argument that the rule violates the right to life under Article 21, the Centre said the opposite was true. According to the government, regulating hospital charges would help protect patients from unreasonable and excessive fees and make healthcare costs more predictable.

At the same time, the Centre admitted that the rule has not been implemented in terms of fixing the actual price range.

The government said health is a State subject and the States need to participate in deciding a practical pricing framework. Several rounds of discussions have been held since March 2024, including a stakeholder workshop, four zonal meetings and a “Chintan Shivir” in March 2026.

However, most States have not yet agreed on a concrete proposal.

The States have raised concerns that a common pricing system may not take into account differences in healthcare costs across regions. They have also said that it could affect the quality of treatment and discourage investment in medical research and innovation.

The Centre informed the Supreme Court that 19 States and Union Territories have adopted the Clinical Establishments Act, while 17 others have their own laws regulating clinical establishments. Most of these laws require hospitals to display their treatment rates but do not provide for a government-fixed price range.

The Centre also pointed to schemes such as Ayushman Bharat to show that steps are already being taken to make healthcare more affordable. It said out-of-pocket health expenditure in India declined from 62.6% in 2014-15 to 43.4% in 2022-23.

The Centre ultimately urged the Supreme Court to dismiss the petition and uphold the validity of Rule 9(ii).