Initially the law, after enactment by Parliament, would come into effect in the States of Arunachal Pradesh, Himachal Pradesh, Mizoram, Sikkim and all Union Territories. It is expected that other States would also adopt this legislation.

The main purpose of the law is to provide a legislative framework for the registration and regulation of clinical establishments in the country and also seeks to improve the quality of health services through the National Council for Standards by prescribing minimum standards of facilities and services which may be provided by them. This would permit categorization and classification of different clinical establishments depending on their geographical location as well as services offered. It will also initiate the process for the creation of a national registry of clinical establishments existing in the country.

Despite many State Legislatures having enacted laws for regulating health care providers, the current regulatory process for health care provides in India is inadequate or not responsive to ensure health care services of acceptable quality and prevent negligence. Accordingly, a need has long been felt for a central legislation for ensuring uniform standards of facilities and services by the clinical establishments.#