1. Writ petition by retired government servant challenging CGHS treatment of ailing pensioners. (Para 1 )
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2000 Supreme(SC) 1500
SUPREME COURT OF INDIA
S.P.Bharucha : V.N.Khare
K.P.Singh
Versus
Union Of India
Case No. : 642 of 1998
Date of Decision : 9/12/00
The government must formally notify procedures for emergency procurement of non-formulary medicines to avoid delays and periodically update medical reimbursement rates to ensure they reflect actual costs, ensuring retired beneficiaries are not unfairly burdened.
Headnote:(A) Health Scheme for retirees - Reimbursement of medical expenses - Emergency treatment and non-formulary medicines - Challenge to administrative memoranda regarding reimbursement rates and procedures - Provisions for emergency references to private hospitals and subsequent ex-post facto approvals are held to be reasonably adequate (Para 3) - Procurement of medicines outside the approved formulary by retired beneficiaries is time-consuming - Requirement to formally notify the provision allowing procurement via authority slips in emergencies (Para 4) - Use of old reimbursement forms is acceptable where modified forms are unavailable (Para 5) - Reimbursement restricted to approved rates regardless of the availability of government hospitals - Approved rates must be updated periodically to reflect actual costs (Para 6).
Facts of the case:
A retired government employee challenged several aspects of a health scheme, specifically the restrictions on reimbursement for emergency treatment in private hospitals, delays in procuring medicines not listed in the approved formulary, the unavailability of specific reimbursement forms, and the failure to update approved reimbursement rates.
Findings of Court:
The court found that recent circulars adequately addressed emergency references. Regarding non-formulary medicines, it directed the government to formally notify the practice of using authority slips for immediate procurement. It accepted the government's claim that old reimbursement forms are still processed. On the issue of outdated rates, the court directed the government to review and update the approved rates on an annual or bi-annual basis.
Issues: Whether the reimbursement procedure for emergency medical treatment and non-formulary medicines was equitable, whether modified reimbursement forms were mandatory, and whether the failure to update approved reimbursement rates was justified.
Ratio Decidendi: Administrative procedures for health benefits must be transparently notified to avoid delays in treatment, and reimbursement rates should be updated periodically to ensure they are not substantially less than actual costs, particularly when public facilities are unavailable.
Result: Order passed directing notification of emergency medicine procurement and review of reimbursement rates.
Legal Category Hierarchy
Table of Contents
2. Dispute over emergency referral procedure, non-formulary medicine reimbursement, form availability, and reimbursement rate adequacy. (Para 2 , 3 , 4 , 5 , 6 )
3. Provisions for emergency referral and reimbursement take reasonable care; indentation delay admitted; rates should be updated. (Para 3 , 4 , 6 )
4. Government must notify emergency medicine procurement procedure and update reimbursement rates periodically. (Para 4 , 6 )
5. Court directed notification of emergency medicine procedure and consideration of rate updates. (Para 4 , 6 , 7 )
6. What is the procedure for emergency referral under CGHS?
CMO in charge may directly refer beneficiary to private recognised hospital; reimbursement restricted to approved rates. (Para 2 , 3 )
7. How can retired beneficiaries obtain non-formulary medicines in emergency?
Medicines can be obtained from local chemist immediately on authority slip from CMO in charge of CGHS dispensary. (Para 4 )
8. Is the government required to update CGHS reimbursement rates periodically?
Court directed Union of India to consider updating approved rates on an annual or bi-annual basis. (Para 6 )
(1) THIS writ petition by a retired Government servant impugns, to put it in general terms, the manner in which the Central Government Health Scheme (CGHS) treats ailing pensioners.
(2) THE first specific challenge is aimed at an office memorandum, dated 11th June, 1997 on the subject of simplification of the procedure for reference to recognised hospitals. The two Clauses which are assailed read thus:
"(III) In case of a medical emergency, the details of which shall be recorded in writing by the CMO in charge of the CGHS dispensary, the CMO concerned may directly (i.e., even before specialists advice has been obtained) refer the CGHS beneficiary to a private recognised hospital for further management/treatment. (iv) The expenditure to be reimbursed by the parent department/office/CGHS Directorate, as the case may be, would be restricted to the package deal rates/rates approved by the Government from time to time. The expenditure in excess of the approved rates/package deal would have to be borne by the beneficiary himself/ herself."
(3) OUR attention was drawn by the learned Counsel for the Union of India to the affidavit in reply to the writ petition and to the circulars annexed thereto. The affidavit states, based on an O.M., dated 11th June, 1997, that in the case of an emergency, the Chief Medical Officer in charge of a CGHS dispensary may directly refer a beneficiary of the Scheme to a private recognised hospital for further treatment. Attention is also drawn to an office memorandum dated 7th April, 1999 wherein, in Clauses (2), (5) and (6), much relief has been given. The same circular provides in the part thereof relating to ex-post facto approvals, for emergency situations. We think that these provisions take reasonably adequate care of what has been pointed out on behalf of the petitioner.
(4) THE next charge is directed at an office memorandum dated 16th August, 1994 that deals with the reimbursement to beneficiaries of the Scheme of claims relating to medicines that fall outside the CGHS formulary. Insofar as beneficiaries of the Scheme other than retired Government servants and freedom fighters are concerned, they can procure such medicines directly from registered chemist and claim reimbursement, on the strength of a filled-in proforma, from the service head of their respective Ministry, Department or office. Insofar as retired beneficiaries under the Scheme are concerned, however, medicines that fall outside the CGHS formulary have to be got indented by the concerned CGHS dispensary. The contention on behalf of the petitioner is that this procedure of indentation takes much time so that the medicine cannot be taken in good time. That this is so, is admitted in the affidavit in reply, but it is stated therein that in the case of an emergency, such medicines can be obtained from the concerned local chemist immediately on the basis of an authority slip from the CMO in charge of the CGHS dispensary. This is stated in the affidavit, but it does not seem to be notified in any circular or office memorandum. We direct that this should immediately be done.
(5) THE third charge is made in regard to a modified Form-97 applicable to applications for reimbursement. The complaint is that such modified forms are not available everywhere. The reply in the counter is that medical reimbursement claims are received and payments are made even in the absence of these modified forms and based on the old forms. We see no reason to doubt the statement.
(6) THE last grievance, and it is of some note, is that a beneficiary of the Scheme will receive reimbursement only at the rate approved by the CGHS, regardless of the fact that in his particular town or city there are only private hospitals and no Government hospital; there is, therefore, no option to him but to enter a private hospital for such treatment. It is also submitted that the approved rates are not updated by the CGHS from tim
