'Marketing expense, referral commission': Raghav Chadha raises lab-doctor nexus issue over medical tests

BJP MP Raghav Chadha recently raised concerns about the alleged nexus between doctors and pathology labs in Rajya Sabha. He alleged that a "referral commission" has become a parallel economy, leading to inflated medical bills for patients. Chadha explained that doctors and labs engage in an informal arrangement where money is put into the doctor's pocket rather than being used for actual treatment. This practice, he claimed, is not about treatment but about referral incentives and cut money arrangements.

Chadha stated that there is a set commission rate, dedicated agents, and a parallel incentive economy surrounding this issue. He mentioned that diagnostic centers refer to this as marketing expense, while doctors call it a referral commission. This commission is usually charged as a percentage of the procedure cost and, in some cases, doctors are even sent on foreign trips.

The BJP MP pointed out that the Medical Council of India (MCI) banned this practice in 2002, and the National Medical Commission (NMC) did the same in 2023, imposing a suspension of 1 to 3 months. He emphasized that this cost is ultimately borne by the patient, inflating the bill by 15-20 percent in some instances. Chadha argued that the issue lies not with the inflated bill but with unnecessary medical tests and over-referrals.

He offered several red flags for patients to be wary of, such as doctors sending them to specific diagnostic centers or displaying irritation when using another accredited lab. Chadha advised patients to be cautious if they see a marketing executive or promotional material from a diagnostic center in their doctor's clinic. He noted that this issue is particularly relevant for tier-2 and tier-3 cities, where the referral commission between doctors and diagnostic centers has become an informal economy that needs to be addressed.