BJP Rajya Sabha MP Raghav Chadha on Thursday alleged that a “cut money” or referral commission system between some doctors and diagnostic centres has become an entrenched practice that inflates patients’ medical bills and encourages unnecessary diagnostic tests.
Raising the issue in the Rajya Sabha, Chadha claimed that some doctors receive fixed commissions from diagnostic centres for referring patients, creating what he described as a “parallel incentive economy.”
“I am talking about the ‘referral incentive’ and ‘cut money arrangement’ going on between some doctors and certain diagnostic centres, which has now become an informal arrangement. Not to treat you, but just to refer you, Rs 3,000 is put into the doctor’s pocket. There is a set commission rate, dedicated agents; it is a parallel incentive economy,” he said.
According to Chadha, these payments are often shown as “referral commissions” for doctors and “marketing expenses” in the accounts of diagnostic centres, while the cost is ultimately passed on to patients.
“In sophisticated language, this is termed as a ‘referral commission’ for doctors, and in the accounts of diagnostic centres, it is recorded as a ‘marketing expense’. This commission is usually charged as a percentage of the procedure cost, and in some instances, diagnostic centres even send doctors on foreign trips,” he alleged.
Citing the Medical Council of India’s Code of Ethics, 2002, and the National Medical Commission’s Registered Medical Practitioner Regulations, 2023, Chadha said referral commissions are prohibited and can attract disciplinary action, including suspension. He further alleged that the practice can increase a patient’s treatment bill by 15 to 20 per cent while promoting unnecessary investigations.
Clarifying that his remarks were not directed at the medical fraternity, Chadha said the issue was with the alleged referral commission system and not with doctors.
“This demand is not against doctors; it is only against the ‘cut money’ referral system. We consider the doctors of our country to be a secondary form of God,” he said, adding that the majority of doctors serve patients with honesty and integrity.
The BJP MP also urged patients to remain alert to what he described as “red flags”, including pressure to visit a specific diagnostic centre, resistance when choosing another accredited laboratory, or promotional material of diagnostic centres displayed inside clinics.
Alleging that the practice is particularly prevalent in Tier-2 and Tier-3 cities, Chadha called for greater transparency in the healthcare system to protect patients from unnecessary financial and medical burdens.
