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Punjab & Haryana High Court Upholds Refund Order Against Neelam Hospital for Overcharging COVID-19 Patient

Chandigarh : The High Court of Punjab and Haryana, in a significant decision, has dismissed an appeal filed by Neelam Hospital Super Speciality Health Care, upholding an earlier order that directed the hospital to refund Rs. 1,36,470 to a complainant for overcharging during COVID-19 treatment. The Division Bench, comprising Justice Tejinder Singh Dhindsa and Justice B.S. Beniwal , found that the hospital had charged amounts exceeding the caps stipulated by the Punjab Government's notification dated 16.06.2020.

The case, LPA-1326-2020 (arising from CWP-10702-2020), reinforces the binding nature of government-mandated rate caps for private hospitals during public health emergencies.

Case Background: Allegations of Overcharging

The matter originated from a complaint filed by an individual (Respondent No. 4 in the original writ petition) alleging that Neelam Hospital had levied excessive charges for the COVID-19 treatment of a patient between 19.06.2020 and 27.06.2020. The complainant contended that the hospital charged Rs. 7,000 per day for a general ward/private room lacking basic amenities, Rs. 10,000 per day for treatment, alongside substantial amounts for medicines and lab tests, in violation of the rates fixed by the Punjab Government.

Inquiry and Committee's Findings

Following the complaint, an inquiry was conducted. A Board/Committee of Doctors, after considering the hospital's reply, concluded that Neelam Hospital had indeed overcharged the patient. The committee's report, dated 02.07.2020, highlighted that: - The patient was admitted under Level-II (moderate sickness) care. - As per the Punjab Government notification dated 16.06.2020, NABH-accredited hospitals (which Neelam Hospital is) were to charge Rs. 9,000 per day for Level-II patients, an all-inclusive package rate. - The hospital had charged Rs. 60,000 for a semi-private room and Rs. 1,08,000 (@ Rs. 12,000 per day for 9 days) for a COVID package simultaneously. - The committee found the hospital charged excessively for bed/package and also for medicines (antibiotics) that should have been part of the package. - The competent authority, vide order dated 29.07.2020 (Annexure P-6), directed Neelam Hospital to refund Rs. 1,36,470 to the complainant. This amount comprised Rs. 1,08,000 for excess bed charges and Rs. 22,470 for medicines, with a further unexplained component leading to the final figure.

Single Judge's Ruling

Neelam Hospital challenged this directive and the committee's report in a writ petition (CWP-10702-2020). However, the Learned Single Judge, by an order dated 10.12.2020, dismissed the petition, finding no merit. The Single Judge observed that any charges raised by hospitals beyond the rates recommended by the Paul Committee and prescribed by the Government must be refunded, and the hospital failed to justify its higher charges.

Arguments Before the Division Bench

In the Letters Patent Appeal (LPA), Neelam Hospital argued that: - The committee and Single Judge had erred, overlooking clarifications provided by the hospital. - No extra charges were levied beyond what was permissible under the 16.06.2020 notification. - The patient required a higher level of care, and extra charges were for services not covered by the notification's package, such as certain antibiotic medicines which they claimed were exclusions.

The State of Punjab, conversely, supported the committee's report and the Single Judge's order, seeking dismissal of the appeal.

High Court's Rationale and Decision

The Division Bench meticulously examined the Punjab Government's notification dated 16.06.2020, which was central to the dispute. Key clauses of the notification stipulate: - For NABH accredited hospitals, the rate for "Moderate Sickness (Isolation Beds including supportive care and oxygen)" is Rs. 9,000 per day. - Clause (iii) clarifies that these package rates are all-inclusive , covering bed, food, monitoring, nursing, doctor visits, standard investigations (including imaging), treatment as per COVID-19 protocol, and standard care for co-morbidities. - Clause (v) reiterates that package rates include medical care for underlying co-morbid conditions. - Clause (vi) specifies that high-cost drugs like Tocilizumab or Remdesivir are excluded from the package and can be charged at MRP.

The Bench noted the hospital's admission that it charged Rs. 12,000 per day for its COVID package (claiming Rs. 9,000 for COVID care + Rs. 3,000 for co-morbidities) in addition to Rs. 6,666 per day for a private room. The Court found this untenable, as the Rs. 9,000 package was all-inclusive and already covered co-morbidities.

The Court stated: > "Perusal of report dated 02.07.2020 of Board/Committee of Doctors read in conjunction with order dated 16.06.2020 clearly negates the allegation that appellant had not indulged in overcharging."

The Division Bench found no illegality or infirmity in the Single Judge's order dated 10.12.2020, which upheld the direction for the hospital to refund the excess amount charged. The Bench specifically affirmed the liability of the appellant to refund the excess charges. While the judgment notes the committee's calculation breakdown (Rs. 1,08,000 for excess bed charges and Rs. 22,470 for medicines, totaling Rs. 1,30,470), the operative order (Annexure P-6) that was upheld directed a total refund of Rs. 1,36,470.

Final Order

The High Court dismissed the appeal filed by Neelam Hospital . This decision underscores the obligation of private healthcare providers to adhere strictly to government-mandated price caps, especially during declared health emergencies, and affirms the right of patients to seek refunds for overcharges.