In response to the Hon’ble Supreme Courts order on 27th Feb 2024  pertaining to Rule 9 of CEA Rules of 2012 and fixing common rates for all Hospitals, FPHNAI - The Federation of Private Hospitals and Nursing Homes Associations’ of India, the federal body representing the different Associations of Private Hospitals & Nursing homes throughout the country has written a letter to the Health Secretary, Ministry of Health & Family Welfare, Govt. of India.

The letter mentions that there has not been any comprehensive scientific study on costing of hospital services which was done pan-India. There was one such initiative by MOH&FW in the year 2014 through Institute of Cost Accountant of India, but it could not be completed due to the complexity, with a lots of variables like level of specialization (Primary/ secondary/ Tertiary/ Quaternary), location (Tier-I/II/III) etc .CGHS rates are not arrived at based on any scientific study and are quite arbitrary. Further the present rates were fixed in year 2014 and have not been revised since then (except for few minor changes). Presently the rates are non-viable for the private hospitals as they are quite below the per-bed expenditure for standard quality care. Hence it would be unacceptable to the hospitals and nursing homes and if implemented would affect the quality of healthcare delivery and the viability of the healthcare institutions.

As regards to the disparity between rates in government and private hospitals, it is to be appreciated that rates in government hospitals are heavily subsidized. If a comprehensive study on costing is done in government hospitals taking into account all the fixed and variable costs, the rates are bound to be much higher than or at the least at par with the rates charged in private hospitals.Fixing hospital rates at CGHS rates or any arbitrary rates, without proper scientific costing
studies will adversely affect the healthcare institutions, their financial viability and sustenance. This is also bound to affect the delivery of healthcare services to the citizens.

The federation has  requested the Health Secreatary to have work out on costing based on established scientific principles and to fix rates in the 'range' and also to address the categorization of establishments.