R.D. Gupta v. DDA and Ors

RD Gupta, the Petitioner, was employed as a junior engineer with the Delhi Development Authority (DDA), the Respondent. He was governed by the Delhi Development Authorities Medical Scheme, 1988 (the Scheme). He underwent surgery for umbilical hernia at the Apollo Hospital (Apollo), “empanelled with the DDA.”

On submitting the medical bills for reimbursement, the Petitioner was reimbursed at the rates prevailing at St. Stephens Hospital, also empanelled with the Scheme. The rates of St. Stephens Hospital were lower than the rates at Apollo.

In a writ petition, the Petitioner sought directions from the Court for full reimbursement of medical expenses along with interest compounded quarterly.

On the issue of the constitutional obligation of the State, the Court placed reliance on State of Punjab v. Mohinder Singh Chawla ((1997) 2 SCC 83). It held that the right to health was an integral part of the right to life. It further held that it was the “duty of the State to bear the expenditure incurred by the Government Servant.”

As to whether the use of staplers was necessary for the treatment, the Court held that a medical practitioner was better suited than the Respondent to decide upon the required form of treatment. The Court also held that in case Apollo had overcharged for the treatment, it was for the Respondent to seek a refund or take any action they thought fit.

Regarding the applicable rates for reimbursement, the Court held that Apollo was an empanelled hospital under the Scheme, which did not restrict reimbursement rates to St. Stephen. It further held that the order relied upon by the Respondent had not been made part of the scheme. The Court held that the state provided huge benefits to private hospitals and it was the state’s responsibility to negotiate with them for more favourable rates.

The Court further held that the Respondent should ensure standardization of rates with as per St. Stephens rates. It, however, held that there should be no standardization for consumables. It, therefore, directed the Respondent to reimburse the Petitioner for “the cost of staplers as charged by Apollo Hospital as also all other consumables including medicines.” The Court limited the reimbursement for room charges surgeon’s fee to charges applicable for St. Stephens Hospital or CGHS whichever was higher.

“The onus lies on the respondent…which has a large work force that before it empanels the Hospital to get the benefit of negotiated rates from the empanelled hospitals, which are in consonance with the rates approved by it.” Para. 13.

“[T]his variation based on the choice of an empanelled hospital should at best apply to the rates for room charges and the surgeon's fee. As regards consumables are concerned, respondent-DDA should ensure uniformity and standardization in their rates in empanelled hospitals with those prevailing at St. Stephens Hospital. It would be for the DDA to take up the matter with the empanelled hospital if price charged for consumables is excessive.” Para. 15.