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Medibank Private deal may be illegal: AMA

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The AMA has cast doubt on the legality of a controversial arrangement under which the nation’s largest health insurer pays a fee in exchange for preferential access to GP services for its members.

Amid fears that the health system is being set on a path toward US-style managed care, the AMA has told a Senate inquiry that it is apprehensive about the implications of the arrangement being trialled between Medibank Private and the Independent Practitioner Network.

“The AMA is very concerned that this type of program sets a precedent where private health insurers are effectively involved in the poorly targeted funding of a broad range of GP services, and that the principle of universal access to health care is being undermined,” AMA President Associate Professor Brian Owler said in his submission to the Senate Standing Committee on Community Affairs.

Under the Medibank Private-IPN arrangement, the insurer pays IPN an administrative fee to enable its members to be guaranteed a GP appointment within 24 hours and have access to out-of-hours care.

The architects of the deal claim it is not in breach of the Private Health Insurance Act 2007 (PHIA) and is in accordance with legislation prohibiting insurers from covering gap payments for GP services – a view support by the Government.

But the AMA questioned the Department of Health’s (DoH) view that the arrangement was consistent with existing legislation.

“It is difficult to agree with this assessment, in so far as we understand that participating GPs, who would otherwise charge a gap, will not be financially disadvantaged when they bulk bill Medibank members,” A/Professor Owler said.

“This implies some form of compensation paid to participating GPs by IPN and, to that extent, this would be linked to the volume of MBS services.

“If, as the DoH contends, the arrangement is technically compliant with the provisions of the PHIA, it is clearly inconsistent with the spirit and intent of the legislation.”

Greens Senator Dr Richard Di Natale has introduced amendments to the PHIA which he said were aimed at removing any ambiguity in the legislation regarding the ability of private insurers to reach deals with medical clinics to provide services not specifically covered by Medicare.

“In order to safeguard the integrity and efficiency of our universal insurer – Medicare – it is necessary to clarify that such arrangements, which create a two-tiered system that favours the insured, are against the spirit and intent of the law,” Senator Di Natale said.

“This Bill amends the [PHIA] to make it clear that private health insurers may not enter into arrangements with primary care providers that provide preferential treatment to their members.”

A/Professor Owler said there was scope for greater engagement between insurers and GPs, but said most existing arrangements were poorly designed and targeted.

“If this situation is to change, there needs to be much more robust engagement with the profession to ensure that future models are in the best interest of patients and the provision of high quality, equitable and sustainable health services,” he said.

Adrian Rollins