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Dr. Bishwanath Prasad Singh v/s Director General of Health Services Ministry of Health & Family Welfare Nirman Bhawan, New Delhi & Others

    Ta(At) (Compt.) No. 04 of 2017, I.A. No. 09 of 2017 (Old Appeal No. 20 of 2017)

    Decided On, 21 September 2017

    At, National Company Law Appellate Tribunal


    For the Appellant: In person. For the Respondents: None.

Judgment Text

A.I.S. Cheema, Member (Judicial)

1. The present appeal has been filed against the order passed by the Competition Commission of India ("Competition Commission" in short) on 14th March, 2017 in Case No.20 of 2014. By the impugned order, the Commission closed the proceedings earlier initiated on information of the Appellant under the Competition Act, 2002 ("Competition Act" in brief).

2. The appellant who has argued the matter in person has been heard at the stage of the admission of the appeal. His grievance relates to Office Memorandum No. S. 11011/23/2009-CGHS D.II/Hospital Cell (Part I) dated 17th August, 2010, which was notified for fresh empanelment of private hospitals and revision of package rates applicable under Central Government Health Scheme ("CGHS" in short) in Delhi NCR including areas of Delhi, Faridabad, Gurgaon, Ghaziabad and NOIDA, which prescribed different rates of reimbursement to private hospitals based on their accreditation with Opposite Party No.4-National Accreditation Board for Hospitals and Healthcare Providers ("NABH" in short).

3. The grievance of the appellant is that the Respondent no. 1-Director General of Health Services ("DGHS" in short) has prescribed different rates of reimbursement to the private hospitals, based on their accreditation or non-accreditation with NABH. According to him, this is unfair and gives benefit to selected hospitals and thus, there is a violation of Section 3 of the Act.

4. In the "Submission of the Documents and Arguments" dated 7th July, 2017, which have been filed and in his oral submissions, the appellant stated that due to Respondent no.1 professional fee to the Doctor when he sits in a hospital which is accredited and when he sits in another hospital which is not accredited to NABH, becomes different. It is stated that if the same doctor goes and does the same job at super speciality hospital, the fee becomes still more different.

5. Appellant stated that if the Doctor is performing from a hospital attached to NABH, the DGHS pays him more by 15%. It is stated that in the process of consultation, the Doctor is only to give advice and other factors do not matter. According to him, the fee should not vary depending on the place.

6. The appellant submitted that irrespective of the place from where the Doctor renders professional advice, the fee should remain unchanged and any differential rate of payment for. similar interchangeable professional advice will amount to violation of Section 3 (3)(a) of the Act.

7. We have gone through the appeal and the impugned order dated 14th March, 2017.

8. It appears from the impugned order that in view of the order dated 1st March, 2016 passed by erstwhile Competition Appellate Tribunal (COMPAT), in the matter, while deciding the Appeal No. 63/2014, the Competition Commission has proceeded to examine the matter treating Respondent no.1 as an 'enterprise', in view of the earlier directions.

9. The, Competition Commission has observed that the Respondent No.1 renders technical advice on all medical and public health matters and is involved in the implementation of various health services.

It also discussed the status of Respondent Nos. 2 to 4. The Competition Commission noted that Respondent no.4 consists of private hospitals accredited by NABH.

NABH is found to be a constituent of Board of Quality Council of India which consists of private set up to establish and operate accreditation programme for healthcare organizations.

The impugned order shows that the Commission found that NABH has been established with the objective of enhancing the health system and promoting continuous quality improvement and patient safety. NABH provides accreditation to hospitals regardless of their ownership, legal status, size and degree of independence.

10. Neither before the Competition Commission nor before this Appellate Tribunal, the appellant has made submissions as to regarding what is the relevant market referable to Section 2(r) of the Act.

11. The Commission after considering the concerned Office Memorandum observed that the relevant geographic market in the matter would be 'Delhi-NCR Region'.

12. Taking into consideration the beneficiaries of CGHS in the country vis-a-vis consumers based in Delhi NCR, the impugned order records that in terms of market share, Respondent no.1 is a miniscule procurer of health services in Delhi-NCR region.

13. The Commission took note of the fact that accreditation of services is a global norm and is encouraged by various countries in the world to instil confidence amongst people.

14. The Commission concluded that the different rates for reimbursement, followed by Respondent no.1 was based on the premise of compensating more for observing higher standards in healthcare segment and there was valid justification in the pricing policy and it cannot be said to be unfair or discriminatory.

15. It has been observed in Para Nos. 21 and 22 of the impugned order as under: -

"21. The Commission is further of the view that every consumer/procurer must have freedom to exercise its choice freely in the procurement of goods and services. - Such choice is sacrosanct in a market economy as the consumers are in the best position to evaluate what meets their requirements and provides them competitive advantage in provision of services. While exercising such choice, they may stipulate standards for procurement which meets their requirement and the same as such cannot be held as anti competitive.

Moreover, the Commission notes that as per the said Office Memorandum, OP-1 decided the rates of reimbursement through a tender process where the rate quoted by L-i was decided to be the base price/benchmark price for reimbursement. The principle followed for the differential package rates as provided in the said Office Memorandum is:-

(a). Where L-i rates were arrived at on the basis of rates quoted by non NABH accredited hospitals/super speciality hospitals, NABH accredited hospitals will be entitled to reimbursement of certain percentage of additional amount over and above the L-i rates;

(b). Where L-i rates were arrived at on the basis of rates quoted by NABH accredited hospitals, then non-NABH accredited hospitals would be entitled to an amount lower by certain percentage than the reimbursement made to NABH accredited hospitals at L-i rates.

22. Therefore, the Commission observes that the price for each category of health services availed/ medical condition treated for both NABH accredited and non-accredited private hospitals has been discovered through a competitive bidding process which is not arbitrary or one-sided, rather it indicates a procedure by which the procurer discovers the price. Thus, the allegation of the Informant that rates for the reimbursement for treatment of CGI-IS beneficiaries are arbitrarily fixed is without any basis and hence, negated."

16. The Competition Commission has found that there was no contravention of the provisions of Section 4 of the Act by Respondent no. 1.

17. No case of contravention of the provisions of Section 3 of the Act has also been found against any of the Respondents.

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18. At the time of hearing the appellant, his attention was specifically drawn to the findings in the impugned order with regard to accreditation and need of maintaining higher standards in health care segment as well as the fact that tender procedure was being followed by the Respondent no.1 and he was asked that in the circumstances, how he could submit that the acts of the Respondents were anti-competitive. 19. The appellant has not been able to point out any material to show that the impugned order is illegal or wrong and deserves to be interfered with. He went on insisting that for same Doctor in different hospitals the charges should not be different. 20. We do not find any substance in the appeal so as to entertain the same. The appeal is rejected. Appeal dismissed.