ESIC Watches Silently As Private Hospitals Loot Patients Of Rs 1.5k Cr Every Year

The ESIC has been helping for years the private hospital in fleecing the employees,and the Government indirectly, by referring thousands of cases to them knowing fully well that they charge 2.5 times to what the Government hospitals charge for stents.

Madabhshi Sridhar

The ESIC has 36 specialized hospitals, but yet it has to refer certain patients to the private hospitals, who charge 250 per cent more than normal rates and surprisingly the Government is silent on this open fleecing.

The value of loot is estimated to be more than Rs 1,500 crore every year.  This silent and continuous phenomenon is revealed when a socially concerned citizen Pawan Saraswat has filed a second appeal and explained the modus operandi of fleecing through an RTI application.

The CIC (this columnist) has directed the Employees State Insurance Corporation to disclose the number of patients referred by it to private hospitals for the implants and the prices paid to those hospitals. Saraswat has almost proved how these private hospitals empanelled with the ESIC are overcharging patients by almost 2.5 times for stent implants and other cardiac procedures.

When Pawan Saraswat failed to get a response to his queries on the number of patients referred by the ESIC to the private hospitals, and the prices paid by the ESIC to those hospitals for the same, he approached the Central Information Commission (CIC).

He claimed that while deciding the costs of treatment at private hospitals, the ESIC goes by the CGHS rates, and when those are not available, AIIMS rates are followed and if both are unavailable ESIC rates are followed.  In the rarest cases which are not listed either in CGHS or AIIMS or in ESI rate list, the outsourced empanelled “hospital rate minus a discount” is paid, he alleged. Information Commissioner said the question is why the ESIC refers thousands or lakhs of patients to private hospitals knowing fully that they have to shell out 2.5 times the actual price under the CGHS.

The government/ESIC reimburses the inflated costs of the implants/devices as and when the empanelled private hospitals are referred by the ESIC. A big business is being transacted through these references. The ESIC should have complained to the health ministry or Union Government about inflation of prices. Instead, it facilitated it for years continuously leading to unjust enrichment by the private hospitals and stent makers probably with kickbacks to other key players. Hence there is a huge public interest in disclosing the information sought.

CIC explained if the allegation of complainant of inflated rates of the stent is prima facie proved, a criminal cheating case in each implantation of stent has to be booked and probed. This is a serious and widespread crime happening with the knowledge of entire state machinery. It is a serious regulatory lapse and there is nobody to check the stents coming in the boxes. Private hospitals are exploiting this ambiguity, which is sustained by vested commercial interests of corporate medical industry, unethical doctors and deliberate silence by the regulators. This could be mass violation of consumer rights making the ESIC a conduit.

Directing the ESIC to disclose information sought by Saraswat, CIC recommended Department of Consumer Affairs to incorporate speedy remedial measures to stop exorbitant pricing and unjust draining of public resources.

The CIC also recommended the health ministry to consider taking strict action against the hospitals, distributors, doctors or any other concerned medical personnel if found to be involved in inflated pricing manipulations. The Commission required the ESIC to inform the appellant and the Commission whether any probe was ordered into the overpricing issue, if so, what is current status.

CIC commented it is sad that even after repeated complaints and representations from the appellant, the ESCI could not inform him whether any probe was conducted. Saraswat claimed that although the National Pharmaceutical Pricing Authority recently slashed the prices of lifesaving coronary stents by upto 85 per cent and fixed a ceiling price of Rs 7,250 per piece for bare metal stents, and allowed a maximum retail price of Rs 29,600 for drug eluting stents, yet this policy is not being implemented.

The Commission found that mere capping of the price of the implanting devices will not end the exploitation of the patients, the government should also consider capping the cost of entire operation, diagnosis, process and post-implantation consequences.

The ESIC is expected to protect its patients for whose benefit it was formed instead of leaving them as gullible victims of greed of private health malls.

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