Govt. Of Nct Of Delhi & Anr. vs Dr. Prem Prakash
2008 Latest Caselaw 1401 Del

                           HIGH COURT OF DELHI

%                      Date of decision: August 20, 2008

                        WP(C)No. 13435-37/2006


#Govt. of NCT of Delhi & Anr.                          ..Petitioners

                          through
!                         Mrs.Avnish Ahlawat with Ms.Latika Chaudhary,
                          Advocate

                                   Versus

$Dr. Prem Prakash                                      ..Respondent

                          through
^                         Mr. Sudershan Rajan with Mr.Kunal Tandon,
                          Advocates for the respondent
                          Mr. Sanjeev Puri, Sr. Advocate with Mr.Gyaltsen
                          B., Advocate for respondent No.2-EHIRC
                          Ms. Sonia Mathur, Advocate for UOI

                        WP(C)No. 12968-70/2006


# Govt. of NCT of Delhi & Ors.                         ..Petitioners

                          through
!                         Mrs.Avnish Ahlawat with Ms.Latika Chaudhary,
                          Advocate

                                   Versus

$ G.R. Arya                                            ..Respondent

                          through
^                         Mr. D.C. Vohra with Mr.Sudershan Rajan,
                          Advocates for the respondent
                          Mr. Sanjeev Puri, Sr. Advocate with Mr.Gyaltsen
                          B., Advocate for EHIRC
                          Ms. Sonia Mathur, Advocate for UOI

Coram :

* Hon'ble Mr.Justice Manmohan Sarin
  Hon'ble Mr.Justice Vipin Sanghi

    (1) Whether reporters of local paper may be
        allowed to see the judgment?                         Yes

    (2) To be referred to the reporter or not?               Yes

    (3) Whether the judgment should be reported              Yes
         in the Digest ?


WP(C)Nos.13435-37/2006 & 12968-70/2006                     Page 1 of 14
    Manmohan Sarin, J.

1. By this common judgment, two petitions namely "Government of

NCT of Delhi and others versus Prem Prakash" being WP(C) No.

13435-37/2006 and "Government of NCT of Delhi versus G.R.

Arya" being WP(C) 12968/70/2006 are being decided, since both

involve the question of extent of reimbursement of medical claims

to Government employees-ex employees. Vide orders dated

6.3.2006 in O.A. No. 1776/2005 and judgment dated 3rd February

2006, in OA No. 2242/2005 the Central Administrative Tribunal

granted reimbursement of their expenses on medical treatment.

The Tribunal allowed the applications of the respondents holding

them entitled to be reimbursed the entire amount of medical

expenses since these were incurred at the empanelled hospitals

with treatment being authorized by the Government of NCT.

2. The Govt. of NCT of Delhi by these writ petitions, is seeking

quashing of the orders of the Tribunal. In WP(C)No.13435-37/2006

referred to as Dr. Prem Prakash‟s case, out of the total amount of

Rs.2,76,444/- (Two Lac Seventy Six Thousand Four Hundred and

Forty Four only) expended by the respondent for the treatment of

his wife, the petitioner sanctioned the amount of Rs. 1,60,244/-

(One Lac Sixty Thousand Two Hundred and Forty Four only). In

WP(C) 12968-70/2006, i.e. G.R. Arya‟s case, the medical claim of

respondent herein and his wife was reduced by the petitioner from

Rs.4,12,934/- (Four Lac Twelve Thousand Nine Hundred and Thirty

Four only) to Rs. 2,67,745/- (Twelve Lac Sixty Seven Thousand,

Seven Hundred and Forty Five). The Tribunal vide the impugned

orders, directed the petitioner, to reimburse the remaining amount

of medical expenses to the applicants (respondents herein).

3. Before noticing the grounds raised in the present petitions, facts

leading to the filing of the two petitions may be noted briefly:

WP(C) No. 13435-37/2006

(i) Respondent is a holder of medical facility card and is entitled

to avail medical facilities for himself and his family

members. It is common ground that Escorts Heart Institute

and Research Centre (hereinafter referred to as EHIRC) is an

empanelled hospital. The respondent‟s wife had suffered

cardiac discomfort and was rushed to the EHIRC for

diagnosis and treatment. She was admitted on 25.1.2004

and was suffering from unstable angina. On her condition

stabilizing, an angiography was performed on 27.1.2004 and

the coronary angioplasty was done on 29.1.2004. She was

discharged from the hospital on 31.1.2004. The package

rate as per the OM dated 7.9.2001 is stated to be applicable.

(ii) The EHIRC raised a bill for Rs.2,76,444/- (Two Lac Seventy

Six Thousand Four Hundred and Forty Four only) but the

petitioners reimbursed only Rs.1,60,244/- (One Lac Sixty

Thousand Two Hundred Forty Four only) as per the package

rate. As noted earlier, the Tribunal had directed the

payment of the differential amount. Vide orders dated

28.8.2006 in the writ petition, the petitioner was asked to

deposit the differential amount in Court. Petitioner deposited

the same. The EHIRC was made a party in these proceedings

and its response was invited to seek clarification with regard

to allegations of charging in excess of the package rates.

The EHIRC claims that the bill has been raised strictly in

terms of OM dated 7.9.2001 and there was no overcharging.

(iii) We have had a look at the bill in question. The charges for

two items in the bill catch our attention. Firstly, charges for

an injection „Reopro‟ which is Rs.42,640/- and the cost of

Cypher Stent, which is Rs.1,22,750/-. These two items are

consumables in the bill at Sl. No.29 and 30. The questions

arising are whether the charges are covered by

memorandum of 7.9.2001 and if not, who is liable for the

payment of the amount billed in excess of the package rate.

We shall consider these aspects later in the judgment.

4. Let us notice the salient facts with regard to the WP(C)No.12968-

70/2006, i.e. G.R. Arya‟s case.

WP(C)No.12968-70/2006

(i) Respondent G.R. Arya had superannuated from the

Government service after rendering service as Survey

Instructor in Pusa Polytechnic. His wife suffered a heart

attack on 28.12.2002. She was rushed immediately for

emergency medical aid to "Neelu Sawan Angel" nursing

home at Saket from where, she was advised to be shifted to

Batra Hospital. Angiography was performed which showed

blockage in major vessels. She was operated for bypass on

30.12.2002. Respondent sought reimbursement of medical

bills to the tune of Rs. 4,12,934/- (Four Lac Twelve Thousand

Nine Hundred and Thirty Four only) for his wife‟s treatment.

Out of the total amount, Rs.2,67,745/- (Two Lac Sixty Seven

Thousand Seven Hundred Forty Five only) was sanctioned.

(ii) Respondent had sought for himself permission to get treated

at the EHIRC for his ailment, which was granted being an

empanelled hospital. The bill for the treatment was

Rs.4,45,585.45/- (Four Lac Forty Five Thousand, Five

Hundred Eighty Five and Forty Five paise only). A sum of

Rs.2,37,200/- (Two Lac Thirty Seven Thousand Two Hundred

only) was sanctioned out of the said amount for the

angiography and angioplasty done. Respondent‟s case for

full reimbursement was rejected on the ground that the

package rate has been revised from 24.5.2004, while his

treatment was for an earlier period and he was entitled only

for earlier package rate reimbursement and not the full

reimbursement.

5. EHIRC was impleaded as a party on an application moved by the

Government of NCT as it was noticed that EHIRC has been

charging more than the permissible package rates resulting in

extra expenditure to be incurred by the Government servant or

the Government and resultantly, the Government being compelled

to pay the same under the directions of the Court to the

employee. Further, the use of injection like Reopro and Cypher

Stents (medicated Stent), which are far more expensive than the

ordinary Stents, are frequently used as part of the consumables

thereby bringing an imbalance to the package rates. EHIRC in

reply, stated that the members of CGHS scheme are charged at

the rates prescribed under the CGHS scheme and no extra charge

has been levied and that they were following the procedures of

the scheme. EHIRC also denied that normal rates as applicable to

general patients are charged to CGHS employees. Further,

patients who are members of the Scheme, are being charged for

rates under the Scheme. As regards the patients hospitalized

beyond the period covered by the package rate, they are charged

as per the CGHS prescribed rates for the extended period and not

as per EHIRC normal rates. By way of illustration, they have

stated that Dr. Prem Prakash was charged @ Rs.1,57,219/- as

against the normal charge of Rs.2,10,650/- being a member of the

CGHS Scheme. In other words, the Hospital reasserts that only

rates as approved under the CGHS Scheme are being charged.

6. Mrs. Ahlawat appearing on behalf of the Government of NCT

submitted that the reimbursable amount as per the Government

would only be the amount as per the package rates. She submits

that even in emergency cases, full reimbursement is not allowed

and it is for the Head of the Department to decide as to what

would be the permissible reimbursement.

7. The next submission of Mrs. Ahlawat was that the State does not

have unlimited resources and as laid down in the case "State of

Punjab & Ors. Vs. Ram Lubhaya Bagga & Ors." reported at (1998)

4 SCC 117, the State is fully justified and entitled to prescribe

limits and its liabilities for reimbursement and it cannot go beyond

the said limits. Learned counsel also assailed the award of

interest on the balance amount directed to be reimbursed. In the

case of G.R. Arya, Mrs. Ahlawat submitted that granting of

permission to get treatment at a particular hospital does not

tantamount to allowing full reimbursement. It was urged that the

treatment of the respondent himself was not of an emergency

nature. An extra amount of Rs.14,000/- spent had been

sanctioned by the Head of the Department in respect of the

respondent‟s wife‟s case. In short, the submission is that the

liability is confined to the package rates.

8. The Tribunal in allowing the OA proceeded on the basis that it was

the non-availability of well equipped Government hospitals that a

Government servant is forced to approach private hospitals, which

are well equipped. The Government recognizing this, has

empanelled these Institutes and Hospitals and settled package

rates. The assumption being that the cost of treatment would not

exceed the package rate. In case the hospitals are charging more

than the package rates, it was a matter between the Government

and the Institutions to settle but the Government servant should

not be burdened with the cost.

9. In the judgment delivered in the case of G.R. Arya, the learned

member of the Tribunal has placed reliance on the decisions of

Delhi High Court holding that if a person is treated in an approved

hospital in emergency, he cannot be denied the full

reimbursement. In case hospital has charged extra, it was for the

respondent to take the matter with the hospital. Reference was

invited to "Milap Singh Vs. UOI & Anr." reported at All India Cases

2004(22) 589, "Prithvi Nath Chopra Vs. UOI & Anr." reported at

111(2004) DLT 190, "V.K.Gupta Vs. UOI & Anr." reported at 97

(2002) DLT 337 and "M.G.Mahindru Vs. UOI & Anr." reported at

92(2001) DLT 59.

Counsel for the respondent relied on "State of Karnataka and Anr.

versus Sri. R. Vivekananda Swamy", JT 2008 (4) SCC 553

wherein it was held that rules may limit the reimbursement of

medical claim. There is no controversy with regard to the power to

limit the reimbursement by framing rules. We are concerned with

cases where exceptions have been carved out for reimbursement

of billing in excess of package rates and the grounds therefor.

10. Relying on the aforesaid judgments, the Tribunal quashed the

impugned order and directed the petitioner to release amounts

which had been spent by the respondent either on his treatment

or his wife‟s treatment in EHIRC or Batra Hospitals within three

months.

11. Let us consider the two items, which we had noticed in the bills of

Dr.Prem Prakash, namely, injection Reopro and the cost of Cypher

Stent. Package rate is more comprehensively defined in the 2001

OM as compared to the 1998 OM. It is defined as the lump sum

cost of in-patient treatment or diagnostic procedure. The rate

includes operation charges, procedural charges, cost of

disposable, surgical charges and cost of medicine. The personal

items such as TV, telephone etc. charges are specifically excluded.

It is also mentioned that "implant shall be reimbursed as per

actuals except for the items where ceiling is defined." The

injection Reopro is given to prevent stenosis. It should not

normally be billed separately and should form part of the

angiography and angioplasty procedures and included in the total

package cost. The cost of Stent could either fall under the lump

sum charge as cost of disposables or surgical charges, which

should not be separately charged by the hospital. Alternatively, if

it is to be treated as part of the implant, to be reimbursed at

actuals or at the ceiling fixed between the CGHS and the hospital.

It is submitted that in either case, the employee should not be

made to pay for these charges which would should be

borne/absorbed by the hospital/Government or partly by both.

12. Our attention has been drawn to a recent decision of a Division

Bench of this Court in WP(C)No.13740/2005, Sh Balram Sharma

versus Union of India and Anr. dated 4.7.2008. This was also a

case where petitioner was seeking full reimbursement of medical

expenses incurred by him while undertaking the treatment at

EHIRC from his employer, Department of Telecommunication.

Petitioner‟s O.A. before the Tribunal had been dismissed. It is not

necessary to recapitulate the facts of that case except to notice

that the petitioner was diagnosed to be a case of Triple Vessel

Disease with mild left ventricular disfunction requiring open heart

surgery and Carotid surgery being a high risk surgery.

Petitioner‟s total bills came to Rs.2,30,306/-. Out of the aforesaid

amount, a total amount of Rs.1,30,612/- was reimbursed to him.

This led to protracted correspondence. Petitioner had placed

reliance on the judgment of a Division Bench of this Court in

WP(C)No.2464/2003 titled "Sqn. Commander Randeep Kumar

Rana Vs. Union of India" as well as the judgment of the Supreme

Court in "State of Punjab & Ors.Vs. Mohinder Sigh Chawla"

reported at JT 1997 (1) SC 416. The Supreme Court in the above

case observed:

"If the government servant has suffered an ailment which requires treatment at a specialized approved hospital and on reference whereat the government servant had undergone such treatment therein, it is but the duty of the State to bear the expenditure incurred by the government servant. Expenditure, thus, incurred requires to be reimbursed by the State to the employee."

The Court on appreciation of the record before it, concluded that

AIIMS had referred the petitioner to EHIRC realizing the

seriousness of his ailment and gave permission to him for

treatment. We may also notice that in this case, the petitioner

himself had given an undertaking that any extra expenditure

would be met by the petitioner himself and it was on this basis

that the permission had been granted.

13. After reviewing several judgments of this Court on the subject and

the Supreme Court and as noticed in para 13 of the judgment, it

was held that while balancing the interest of the Government

which does not have unlimited funds on the one hand and,

therefore, has to limit his financial resources and paying capacity

as also its duty towards its employee to reimburse medical

expenses, a balance could be struck by directing the respondent-

Government to reimburse medical expenditure in full when the

following conditions are met:

(a) The private hospital where the treatment is taken by a Government employee is on the approved list of the Government.

(b) The illness for which the treatment is required is of emergent nature which needs immediate attention and either the Government hospitals have no facilities for such treatment or it is not possible to get treatment at Government hospital and it may take unduly long for the patient to get treatment at Government hospital.

(c) The concerned employee/patient takes permission to get treatment from the Government hospital, which is granted and/or referred by the Government hospital to such a private hospital for treatment.

14. Following the aforesaid judgment of the Coordinate Division

Bench, we are of the view that in the cases before us, the

aforesaid three conditions are duly met. These were serious and

emergent cases of cardiac ailment. The treatment was with the

permission of the competent authorities and at the empanelled

hospitals. Therefore, the respondents would be entitled to full

reimbursement. We may mention that it would be open for the

respondents to delete from the bills, charges for items like

telephone, TV, cost of toiletries etc., which do not form part of the

package rates and if the same have been billed.

15. In view of the foregoing discussion, we are of the view that no

case is made out for interference in the exercise of writ jurisdiction

with the orders passed by the Tribunal except the amount, as

deposited, in the case of Dr. Prem Prakash, be released. In the

Writ Petition No.12968/2005, the balance amount, subject to

admissible deductions for charges like telephone charges, TV

charges, cost of toiletries etc. be released to the respondents

without interest in the circumstances of the case. Ordered

accordingly. It would be for the Government of NCT of Delhi to

recover from the concerned hospital any billing in excess of the

admissible rates under the scheme.

16. Before parting with this case, we may observe that a lasting

solution has to be found for this recurring problem where the bills

of the empanelled hospitals are invariably far more than the

package rates. In a writ petition bearing WP(C) No.4754/1996

titled "T.S. Oberoi Vs. Union of India & Anr." one of us (Manmohan

Sarin, J.) had the occasion to observe as far back as 30th May, 2002

and give directions to the Central Government in the following

terms:

"In my view, it is high time that the Central Government/CGHS authorities, while conferring the status of recognized Government speciality hospital should re-negotiate the package rates for various procedures and treatments. The private hospitals receive several benefits from the State in terms of allotment of land at concessional rates, exemption or benefits of concessional custom duties in import of surgical, diagnostic, medical and other equipments and consumables. More often than not the stipulations and directive to the private Hospitals for providing a certain % of free rooms or treatment for economically weaker sections are not implemented. A large number of Government and public sector employees are referred to private speciality hospital for treatment. These constitute substantial business for any hospital. It is for the CGHS Authorities to negotiate with the private hospitals from a position of strength, so that discounted package rates and advantageous terms are offered to employees for different procedures irrespective of some individual variation in treatment. The authorities can also endeavour to have a modified package for cases entailing extra stay or repeat procedures. This is

especially so, when the public hospitals are not in a position to cater to the requirements and meet the ever increasing demand with adequate facilities not being available. An earnest endeavour is required on the part of the Central Government to arrive at better negotiated terms for itself and its employees."

17. The package rates as negotiated, have left much to be desired.

These do not reflect availing of maximum benefit from institutes

and hospitals, who are empanelled and are recipients of largesse

from the State in terms of allotment of land at concessional rates,

reduced customs duty on import of medical equipment and

drugs. We are of the view that the Government, Director General

of Health Services, Health Ministry, Govt. of NCT and the

concerned State authorities should approach the

institutions/hospitals after collecting data with regard to the

number of patients referred from Government departments, State

public undertakings, who are availing their services. It is our belief

that these employees including retired employees, represent a

sizeable segment of patients, which no institute or hospital can

afford to ignore or not give preferred treatment at concessional

rates. In particular, while negotiating the package and other rates

for services, it has to be borne in mind that an individual

employee, who is serving or has served the State, should, as far as

possible, be not subjected to economic burden of treatment at

high costs considering the limited emoluments vis-à-vis the private

sector and the desirability of ensuring good health for the

employees. Further, that it is the lack of availability of adequate

number of specialized State owned hospitals, having the required

capacity and skills and equipments to offer the treatment on time,

that resort is had to the institutions and the hospitals in the

private sector. It is desirable that a Government employee or the

employee of the State undertaking remains assured that in the

event of any emergency or illness, he would receive treatment

without being burdened financially. Towards this end, the

approach in drawing or settling package rates for various

procedures, treatment etc. has to be to protect the employee and

the State against hidden or unforeseen costs, which result in

excessive billing over the package rates. Such contingencies need

to be anticipated and provided for. It should be possible to take

care of these contingencies by providing for a marginal increase in

the package rate itself, which is made available across the board

to the institutions and hospitals. Provisions can be conveniently

made for:

(i) Extended stay beyond the period prescribed in the package

by providing for a grace period for one or two days for

which, there should be no charge except the actual cost of

drugs and consumables;

(ii) For extended period of stay beyond the grace period

charges should be at concessional rates rather than the

package rate for stay;

(iii) In case of repeat procedure necessitated due to any error

or omission or procedure having not been performed with

the requisite skill, there should be no charge for the repeat

procedure including extended stay to perform the

procedure etc. except for consumables;

(iv) Ensuring that imported or expensive drugs are supplied or

charged at landed cost, plus a service charge of not more

than 5 to 10%.

(v) Laying down guidelines to the extent possible regarding

use of expensive implants, stents etc.

18. These are some of the measures which commend to us. However,

it is entirely for the Government and Executive Authorities, who

are expert in the field, to devise and structure the various scheme

and packages so as to derive the maximum benefit, which would

enable it to provide better health care for its employees at lesser

cost to itself.

The Director General of Health Services, Govt. of India as

well as Director, Health Services, Govt. of NCT should review their

existing schemes and submit a report on the measures taken by

them in the light of observations made in the judgment within 4

months.

Petitions stand disposed with the above directions.

Manmohan Sarin, J.

August 20, 2008                                    Vipin Sanghi, J.
Rk