THE NATIONAL COMMISSION FOR CONTROLLING MEDICAL INFLATION BILL, 2022

AS INTRODUCED IN THE RAJYASABHA

BILL

to provide for the establishment of a National Commission for Controlling Medical Inflation in order to monitor, regulate and standardise the rising costs of medicines, medical diagnostic tests and pathological examinations, and for matters connected therewith.

BE it enacted by Parliament in the Seventy-third Year of the Republic of India as follows:-

Short title, extent and commencement.

1. (1) This Act may be called The National Commission for Controlling Medical Inflation Act, 2022.

(2) It extends to the whole of India.

(3) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.

Definitions

2. In this Act, unless the context otherwise requires,—

(a) “appropriate Government” means in the case of a State, the Government of that State and in all other cases, the Central Government;

(b) “Medical Inflation” means an increase in the average medical expenditure per person from year to year.

(c) “Medical Expenditure” means expenses related to necessary medical, surgical, x-ray or dental services, including prosthetic devices, and necessary ambulance, hospital, professional, nursing and funeral services.

(d) “Medical Practitioner” means a person who holds a valid registration from the Medical Council of any State or Medical Council of India or Council for Indian Medicine or for Homeopathy set up by the Government of India or a State Government and is thereby entitled to practice medicine within its jurisdiction, and is acting within its scope and jurisdiction of license.

(e) “Diagnostic Laboratory” means a place owned or run by an industrial or a group of persons or by a private or corporate hospital where pathological tests or investigations are conducted on the advice of a bona fide medical practitioner.

(f) “Diagnostic Tests” means a variety of physical examinations—both invasive and non-invasive—given by medical professionals to confirm the presence or absence of illness/disease in patients. These tests include:

(i) all such pathological tests that are prescribed by qualified doctors whether in a private clinic or a private and/or corporate hospital; and

(ii) all such scanning or imaging services, namely, x-ray, ultrasound, MRI, or CT scan, whether in a private clinic or a private/corporate hospital.

(g) “National Commission” means the National Commission for Controlling the Medical Inflation under section 3; and

(h) “prescribed” means prescribed by rules made under this Act.

Establishment of a National Commission for Controlling Medical Inflation

3. (1) The Central Government shall, by notification in the Official Gazette, establish a Commission to be known as the National Commission for Controlling Medical Inflation in the country in order to monitor, regulate and control the rising costs of medicines, medical diagnostic tests and pathological examinations.

(2) The Commission shall consist of —

a. Chairperson;

b. Deputy Chairperson; and

c. Five members

to be appointed by the President by warrant under his signature and seal from amongst the persons having special knowledge and vast experience in the field of public health, healthcare management, hospital and diagnostic tests industry.

(3) The Central Government may appoint such number of officers and staff including experts to the Commission as may be required for its efficient functioning.

(4) The salary and allowances payable to, and other terms and conditions of service of the Chairperson, Deputy Chairperson, members, officers, staff and experts of the Commission shall be such as may be prescribed.

(5) The National Commission shall have the power to regulate its own procedure.

4. Functions of the National Commission

(1) To monitor the rising medical expenses and out-of-pocket expenses regularly, and take necessary steps to control the medical inflation in the country.

(2) To standardise the prices of essential medicines, medical diagnostic tests, pathological tests and all other relevant medical and allied services across the country in order to reduce out-of-pocket expenses.

(3) To determine the upper limit of the fee charged for each type of medical procedure, test and service from time to time in consultation with the respective state governments.

(4) To draft a national policy for the standardisation of medical expenses and design an appropriate quality assurance framework for both public and private service providers.

(5) To prepare a standard template for determining the cost of procedures including medical diagnostic tests and pathological tests. A detailed costing exercise for hospitals across the country shall be initiated in order to determine average costing modalities and cost inputs under various components so that it can help streamline reimbursements as well as the pricing of healthcare services.

(5) To ensure the rational prescription of drugs by each practitioner with their generic names written legibly in capital letters.

President to lay report

5. (1) The President shall cause to be laid before each House of Parliament all the reports submitted to him under clause 4 along with a memorandum explaining the reasons for not accepting any of the recommendations made thereto.

(2) Where the report or any of its part is related to any of the issues connected with the State Government, a copy of such report shall be forwarded to the Governor of that State, who shall in turn, along with an explanatory memorandum concerned with the action taken or proposed to be taken on the recommendations related to the State, if any, and reasons for not accepting any of the recommendations, cause to be laid such report before the State legislature.

Commission to have powers of Civil Court

6. The National Commission shall, while investigating any matter referred to it under clause 4 have all the powers of a Civil Court trying a suit and, in particular in respect of the following matters, namely:-

(a) summoning and enforcing the attendance of any person from any part of India and examining him on oath;

(b) requiring the discovery and production of any document;

(d) requisitioning any public record or copy thereof from any court or office;

(e) issuing commission for the examination of witnesses and documents; and (f) any other matter which may be prescribed.

Appropriate Government to consult the Commission.

7. The appropriate Government shall consult the National Commission on all policies related to the control and monitoring of medical inflation.

Central Government to provide adequate funds to the Commission.

8. The Central Government shall, after due appropriation made by Parliament by law on this behalf, provide adequate funds to the National Commission for carrying out the purposes of this Act.

Power to remove difficulties.

9. If any difficulty arises in giving effect to the provisions of this Act, the Central Government may make such order or give such direction, not inconsistent with the provisions of this Act, as may appear to be necessary or expedient for removing the difficulty:

Provided that no such order shall be made after the expiry of the period of two years from the date of commencement of this Act.

Act to have an overriding effect

10. The provisions of this Act and rules made there under shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force.

Power to make rules

11. (1) The Central Government may, by notification in the Official Gazette, make rules for carrying out the purposes of this Act.

(2) Every rule made under this Act shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or both the Houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.

STATEMENT OF OBJECTS AND REASONS

In India, the directive principles of state policy mandate the states to ensure the health and well-being of the workers, children and general public. Apart from that, the judicial review process has put the right to health under the purview of Article 21 of the Constitution of India. Yet, affordable health care is a distant dream for a large number of people in the country. Every year, healthcare expenses are increasing at a very fast rate and even the middle class cannot afford hospitalisation.

In the year 2021, India witnessed the highest medical inflation rate of 14% among Asian countries. As per the official data of the Ministry of Statistics and Programme Implementation, the cost of medical treatment in India went up by 7.21 per cent in April 2022. There is an accelerating rate of increase in the price of medicines, pathological diagnosis, hospitalisation and everything related to healthcare. A record 55 million Indians were pushed into poverty in 2017, because of the high out-of-pocket (OOP) health expenses. This is more than the population of three countries- South Korea, Spain and Kenya. As of now, the out-of-pocket expenditure of an individual for healthcare is 63 % in India. This means that whether an individual has private health insurance or visits a government healthcare facility for treatment, they will have to spend a significant amount from their pocket for getting treated in the country.

One of the most critical reasons for the high medical inflation is the exorbitant rate of medicines, diagnostic tests, pathological examination and cost of other allied services. The Economic Survey of 2017-18 states that, there are wide differences in the average prices of medical diagnostic tests across cities. The data reflects that a lipid profile test can cost a minimum of Rs 90 and a maximum of Rs 7,110 in various states. Similarly, the cost of a 2d echo test varies from Rs 500 to Rs 5200, and Liver Function test costs range between Rs 100-2500.

Diagnosis tests provide vital information to make informed decisions about treatment methods. Hence, limited affordability and less access to quality diagnostic and medical services are among the major challenges contributing to delayed or inappropriate responses to disease control and patient management. The recent findings of the Household Health Expenditure survey in India indicate that about 10 per cent of Out -of- pocket expenses are spent on diagnostic tests. Still, there is hardly any effort to monitor, control, regulate and standardise the price of these tests and essential drugs. Most hospitals follow market-based pricing for tests and allied services.

Therefore, there is an urgent need to regulate, monitor and standardise the price set by corporate hospitals, the differential pricing of drugs, and the functioning of pharmaceutical companies and diagnostic laboratories. The proposed bill seeks to attain the objectives mentioned above through the establishment of the National Commission for Controlling Medical Inflation in the country.

Hence the bill.

FINANCIAL MEMORANDUM

Clause 3 of the Bill provides for the constitution of the National Commission for Controlling Medical Inflation to carry out the responsibilities assigned to it. It also provides for the appointment of a Chairperson, Deputy Chairperson, members, officers, staff and experts to the Commission. Clause 8 provides for the Central Government to provide adequate funds for the functioning of the Commission.

The Bill, therefore, if enacted, would involve expenditure from the Consolidated Fund of India which cannot be estimated at present. Recurring expenditure is also likely to be incurred.

MEMORANDUM REGARDING DELEGATED LEGISLATION

Clause 11 of the Bill empowers the Central Government to make rules for carrying out the purposes of the Bill. As the rules will relate to matters of detail only, the delegation of legislative power is of a normal character.

P. SANDOSH KUMAR