Review of the Supreme Court's order on COVID-19 test pricing at private hospitals: One step forward, one step back?

The Supreme Court of India on April 13 modified its interim order dated April 8, by which it had directed the Centre to issue a notification for conducting free COVID-19 testing at government and private hospitals/laboratories alike.

As per the modification order, the “benefit of free testing by a person can be availed only when he or she is covered under any scheme like Ayushman Bharat Pradhan Mantri Jan Aarogya Yojana” (AB-PMJAY).

Consequences of the modification order

The intent and purpose of the interim order dated April 8 was indeed salutary and laudable. The Court, for the purposes of granting interim relief, had prima facie found merit in the petitioner’s contention that every citizen is not able to afford the test from a private hospital/lab on account of the testing fee being priced at Rs. 4500.

The Court thus made the pricing advisory issued by the Indian Council of Medical Research (ICMR) inoperable.

The interim order dated April 8 had not directed the government to formulate modalities for immediate reimbursement of costs in relation to the tests to the private hospitals. It had wrongly left it for determination to a later date, which had caused anxiety to the private hospitals.

Now, the modification order, passed during the hearing of the intervention applications by the private labs in the PIL, has made a welcome correction and observed that the government “may issue necessary guidelines for reimbursement of cost of free testing of COVID-19 undertaken by private Labs and necessary mechanism to defray expenses and reimbursement to the private Labs”.

However, as far as grant of access to the private labs for COVID-19 tests is concerned, the modification order puts the clock back “in the hour of national crisis” by calling upon citizens other than AB-PMJAY beneficiaries to pay Rs. 4500 for every COVID-19 test in a private laboratory.

A bare reading of the AB-PMJAY scheme shows that it is meant for the lowest strata of the Indian society and a large number of urban and rural poor are left out of its coverage due its stringent eligibility conditions and exclusions.

For instance, (a) all households with any government employee, or (b) a family with any member earning more 10,000/- per month; or (c) a household having a refrigerator, amongst other exclusions, are ineligible for AB-PMJAY benefit. Additionally, the limited coverage of targeted population and low utilization rates on account of such factors as low awareness and implementation of AB-PMJAY, may also leave out the vulnerable poor.

Further, given the peculiar nature of the pandemic, if a person is showing COVID-19 symptoms, more often than not, all family members require testing. This in turn means higher costs for a household in the multiples of Rs. 4500, for every person tested in a private hospital.

Different rates of testing in government and private hospitals arbitrary and unreasonable

It is well settled now that right to health is an integral facet of the right to life and liberty under Article 21 of the Constitution and a core obligation of the government under the Directive Principles of State Policy and also the International covenants to which India is a party. (Devika Biswas vs. Union of India)

A person normally pays out of her own pocket when she voluntarily chooses to take health services from a private hospital instead of a government hospital, in terms of general principles of contract law, subject to usual regulation.

Availing of treatment in normal course from a private hospital out of choice (which implies ability to pay) by a citizen cannot be equated with the COVID-19 testing in these extraordinary times, when it is clear that there is no element of choice involved with the person for a COVID-19 test.

It is also clear that the government hospitals, on their own, are unable to fulfill all their obligations in all cases. As acknowledged by the Supreme Court itself, private labs would not have been required to play a role at all, had there been enough government hospitals with sufficient testing facilities.

In the aforesaid background, as a matter of policy, the government hospitals do not charge for COVID-19 tests regardless of the economic status of a person. The roping in of private labs for one class of citizens (beneficiaries under AB-PMJAY) for free testing is an unequivocal recognition of the fact that public health infrastructure is inadequate.

When the State is willing to pay for all its citizens for testing in government hospitals for COVID-19, it has no legal basis to exclude the same citizen (non AB-PMJAY beneficiaries) from such benefit only because she happens to go for a test in a private hospital (at least till the time pandemic is brought in control with return of normalcy and the element of choice to the patient returns).

In the present circumstances, the classification of the liability for payment by the government differently towards the same citizen depending on whether the COVID-19 test happens in a government or a private lab, is not only arbitrary but also without any nexus to the object (to maintain public health and protect its citizens from COVID-19). Such an approach clearly violates the right to equality under Article 14 of the Constitution.

The Court, by agreeing to such a classification in the modification order, has allowed the illegality to be perpetuated. Although a court order cannot be held to be in breach of fundamental rights (Naresh Shridhar Mirajkar v State of Maharashtra), there is no gainsaying that the courts while exercising judicial review should adopt such approach which is in consonance with the constitutional provisions (Kalpana Mehta v. Union of India).

What if the government frames guidelines to include other economically sections as directed by the Court?

In the modification order, the Court recognizes the ‘plight’ of other economically weaker sections (EWS) apart from AB-PMJAY beneficiaries, but still modifies the interim order to restrict free testing benefits to AB-PMJAY beneficiaries. It directs the executive, that it may consider “as to whether any other categories of the weaker sections of the society” can be given the benefit of free COVID-testing in private labs.”

The aforesaid observation, which replaces the question of entitlement of economically weaker category (EWS) persons for free testing in private hospitals with the discretion of the executive, is a departure from the urgency shown in the April 8 order.

It is noteworthy that the government has opposed the extension of free testing benefits to persons other than AB-PMJAY beneficiaries. However, if it changes stand and includes EWS category by framing guidelines to allow more persons to avail COVID-19 tests free of cost at private hospitals, the classification of EWS and non-EWS is bound to subject a person to production of proof of income before availing the COVID-19 testing facilities.

Such classification is likely to compound issues by introducing additional compliance requirements for both patients to avail the facility and the private hospitals to seek reimbursement from government for such testing.

Experiences consistently show that the requirement of submission of documentary proof acts as a barrier to quick access for availing government distribution schemes/benefits and causes delay, if not outright denial. For this reason alone, the Court could have exercised its discretion in not modifying the interim order granting universal access for testing.

Alternative feasible approaches instead of the modification order

Since the private hospitals were concerned only about reimbursement of costs, the Court could have preserved the spirit of the interim order dated April 8 by directing the government to frame a scheme for immediate reimbursement in all cases of COVID-19 testing in private labs regardless of the patients’ social and economic status.

Such limited modification was sufficient to protect the economic rights of the private hospitals and to incentivize them to offer unrestricted free COVID-19 testing. This approach would have also protected the fundamental right to health of all citizens and imposed a corresponding obligation of payment on the government towards discharge of its duty to maintain public health.

Having said the above, and without prejudice to the case made above for free universal testing at government’s costs, even if there was a desire to keep the comparatively miniscule upper class out of the protective umbrella, the Court could have still refrained from adopting a sledgehammer approach in the modification order.

Instead, the Court, without disturbing the universal access granted in the interim order dated April 8, could have granted liberty to the government, if it so desired, to frame a constitutionally justifiable exclusion criteria based on ‘quantifiable data’ for any alleged ‘creamy layer’ within a certain time frame and tested its validity later. Such a nuanced and cautious approach would have allowed the free testing regime to continue in public interest, in the interim.

The finding of a prima facie case for wider testing in the interim order dated April 8, the preponderance of probabilities and the irreparable injury foreseeable on account of delay, denial and lack of testing facilities, prompted the Court to adopt a cautious and nuanced approach while dealing with the subject matter.

Unfortunately, the modification order took a step back in this regard.

The author is an Advocate-on-Record at the Supreme Court of India and practices before courts in Delhi. He may be reached at tahir.nlu@gmail.com. Views are personal.