After undergoing a hospital procedure, the last thing you need is to receive a medical bill that wasn’t disclosed beforehand and that’s exactly what health insurers are cracking down on, calling on the federal government to introduce legislation to protect consumers from surprise bills.
In a draft policy paper, Private Healthcare Australia (PHA) is calling for legislation to protect patients from surprise medical bills that have not been disclosed prior to the operation and introduce criminal offence charges and fines for doctors who seek to hide medical costs. PHA says the legislation would ensure that if the full cost isn’t disclosed to the patient, then they would not be liable and the doctor would only receive the Medicare Benefits Schedule (MBS) fee for the service.
According to the PHA policy paper, in Australia, a medical practitioner may charge whatever fees they choose in the private system, including when practising as a private provider in a public hospital. The government is currently unable to regulate fees due to a clause in the Australian Constitution.
While insurers and doctors work together to negotiate contracts that pay well in excess of Medicare Benefits Schedule (MBS) fees. These ‘contracted providers’ agree to provide services with no gap or a known gap, and in return they may receive reduced administrative costs, and may get access to a larger volume of patients. Doctors who provide medical services without a contract get none of these benefits but can charge higher prices for their services, which is where the issue lies.
Ben Harris, PHA’s director of policy and research, says the medical industry has done a great job of reducing the prevalence of surprise billing, but it is still an issue that needs to be rectified by the government. According to the latest Australian Prudential Regulation Authority (APRA) data, almost 98 per cent of medical services have no or a known gap.
“Consumers should not be receiving bills with out of pocket costs they are not expecting. Private health care billing should be ‘no surprises’ – patients should only pay a gap where it has been disclosed beforehand,” he said.
“The medical profession, led by the AMA, has done a great job to reduce unknown out of pocket costs over the last decade or so. Large, unknown out-of-pocket costs have declined significantly over the past decade, but it is still an issue – a small number of customers are receiving bills they are not expecting.
“What PHA is proposing is simple: if you get a bill you are not expecting, you are only liable for the amount of the MBS fee. There will be no gap payment payable unless it is disclosed beforehand.
“We are also suggesting legislation to eliminate split billing, where separate bills are sent to the government, the insurer and the patient that don’t disclose the full cost.”
Harris described split billing – where doctors bill Medicare, the health insurer and the patient separately without each other’s knowledge – as an “insidious practice”.
Harris explained there are four types of surprise bills, with out of pocket costs you are not expecting such as anaesthetics or assistance at operations, and says there should only be “an unexpected bill where there is an unexpected service”, which is about 2 per cent of hospitalisations. There are four major types of surprise billing:
Leanne Well, CEO of the Consumers Health Forum, welcomed the policy, telling The Australian that consumers should know all of the financial details prior to any procedure. “At the very least, consumers should receive a single, detailed quote covering all components of their care beforehand,” she said.
“The surgeon or leading doctor should take responsibility for providing the patient with this information and be required to adhere to informed financial consent guidelines adopted as a national standard. To help make it clear that there may be additional costs if there are complications, these should be routinely explained to consumers in the single quote.
“Out-of-pocket costs and ‘bill shock’ continue to erode the value of private health insurance. Changed practices to support consumers to do this are long overdue. We support the PHA’s recommendations as consumer protection measures worthy of exploration.”
IMPORTANT LEGAL INFO This article is of a general nature and FYI only, because it doesn’t take into account your personal health requirements or existing medical conditions. That means it’s not personalised health advice and shouldn’t be relied upon as if it is. Before making a health-related decision, you should work out if the info is appropriate for your situation and get professional medical advice.