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06 Mar 2018
Bupa has recently announced changes to their no-gap and known-gap policies. These changes are bad news for the profession and our patients. They are bad for the reputation of private health insurance. They are bad news for the contribution that the private system makes to the Australian health care system.
Starting 1 August 2018,  no-gap and known-gap rates will now only be paid to the practitioner if the facility in which the procedure takes place also has an agreement with Bupa. Medical benefit rates outside those facilities will now only be paid at the minimum rate that the insurers are required to pay – that is, 25% of the MBS.
It is a fundamental shift with a number of serious implications.
Firstly, for patients. Insurance is complicated enough – yet patients will now be expected to ensure that not only does their treating doctor have an agreement with their insurer, but that the hospital also has an agreement. If they don’t, they could face significantly increased out of pocket costs (with blame likely levelled at the profession), or they may simply not have access to their doctor of choice, due to inadequate insurance coverage.
It also means they will not be guaranteed suitable coverage in a hospital of their choice. It undermines the value of their insurance.
For medical professionals and hospitals, the changes may have a number of implications.
Medical professionals often do not have a role in the hospital and insurer contracting arrangements, but will now be adversely impacted if the hospital does not have an arrangement in place.
For hospitals without an agreement, it will likely mean that they can no longer attract Bupa insured patients (and by extension their treating doctors).  If these arrangements take hold, or worse spread, then insurers will have the upper hand in future negotiations. It will make a mockery of the second tier arrangements, which we have only just finished successfully defending.
This issue may flow-on to a significant number of day hospitals. It will also affect a number of private hospitals, and potentially have a detrimental impact on public hospitals who treat private patients. It is counter-intuitive to the drive for better, and more efficient patient care – the ability to secure a contract with an insurer is no measure of quality, safety or efficiency.
For patients, doctors and hospitals alike, the changes proposed by the largest PHI in Australia, a massive multinational company headquartered in Britain, to no and known-gap arrangements are one big leap towards managed care.
The fact that the change has occurred straight after a premium increase, straight after agreement was made to retain second tier rates for non-contracted facilities, and straight after an announcement by Government to work collaboratively with the sector on the issue of out of pocket costs is unconscionable.
I have raised our concerns directly with Minister Hunt and his office, highlighting that in addition to heading down a managed care pathway, Bupa’s change undermines a lot of the work performed by the Private Health Ministerial Advisory Committee over the past 12 months.
We have requested the Government urgently seek advice from the Department of Health and the Private Health Insurance Ombudsman as to the legality of Bupa’s actions. We have asked them to look at potential ACCC implications. In the last few days we have also been engaging with a number of relevant professional, consumer and hospital peak bodies. We will continue to take a leading role in coordinating a push back from the sector to this change.
I can assure you that the AMA will continue to oppose any move to a managed care system, or any system that impairs the sanctity and primacy of the doctor-patient relationship.

Published: 06 Mar 2018