Section 58 · Provision of medical treatment by the State Government

(1) The State Government shall provide for reasonable medical, surgical and obstetric care in the State for the insured persons and (where such benefit is extended to their families) their families:
Provided that the State Government may, with the approval of the Corporation, provide for medical treatment in the clinics of medical practitioners on such scale and on such terms and conditions as may be agreed upon.
(2) Where it is found that the incidence of sickness benefit payments to insured persons exceeds the all-India average in any State, the amount of such excess shall be shared by the Corporation and the State Government in such proportion as may be fixed by agreement between them:
Provided that the Corporation may, in any case, waive the recovery of the whole or any part of the amount which is to be borne by the State Government. (3) The Corporation may enter into an agreement with the State Government as to the nature and scale of medical treatment (including the provision of buildings, equipment, medicines and staff) which should be provided to insured persons and (where such medical benefit is extended to their families) to their families, and for the sharing of the cost thereof and of any excess in incidence of sickness benefit to insured persons between the Corporation and the State Government. (4) In the absence of an agreement as aforesaid between the Corporation and a State Government, the nature and extent of medical treatment to be provided by the State Government, and the proportion in which the expenses thereof and the excess of the incidence of sickness benefit shall be shared between the Corporation and that State Government, shall be determined by an arbitrator (who is, or has been, a Judge of a [High Court] of any State) appointed by the Chief Justice of India and the award of the arbitrator shall be binding on the Corporation and the State Government.
(5) A State Government may, in addition to the Corporation under this Act, establish, with the previous approval of the Central Government, an organisation (by whatever name called) for providing certain benefits to employees in case of sickness, maternity and employment injuries:
Provided that any reference in the Act to the State Government shall, whenever such organisation is established by the State Government, include a reference to that organisation. (6) The organisation specified in sub-section (5) shall have such composition and perform such functions, exercise such powers and perform such activities as may be prescribed.