The Australian Competition and Consumer Commission (ACCC) has released its 2012 annual report detailing the anti-competitive practices of health funds in relation to private health insurance. Surprise, surprise: the allied healthcare providers recognised by insurers aren't always based solely on clinical assessments.
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Each year, the ACCC produces a report for the Australian Senate on the anti-competitive practices by health insurers or providers which put consumers needlessly out-of-pocket or reduce the extent of their health cover.
For its latest report, the ACCC focused on the way health insurers recognise certain types of allied healthcare provider over others; a decision that can affect the employment prospects and income of said providers.
The report found that insurers often fail to recognise certain types of allied healthcare provider, despite offering the same or similar services as the companies it did recognise. The "application of commercial judgement" also factored into insurers' recognition decisions in addition to clinical assessments. The ACCC argues that this puts providers at a competitive disadvantage and negatively impacts consumers.
"Insurers’ recognition practices can impact consumers who choose to obtain services from a non-recognised provider and potentially incur higher costs as compared to using a recognised provider and receiving a rebate on their medical expenses," the ACCC argues.
Some of the findings of the report include:
- Private health insurers will recognise at least one category of provider for each service covered by their PHI products. However, some members experience difficulty accessing the services of providers that are recognised by their insurer and may need to call on the services of an unrecognised provider. This is more common in rural and remote areas where the number of recognised providers is not always sufficient to meet consumer demand.
- All allied healthcare providers identified in submissions as not recognised had some of their services recognised by some insurers, though not always on the same terms. For example, the ACCC found that there are some insurers that recognise dieticians but not nutritionists and others that recognised nutritionists but not dieticians, and still others that recognise both dieticians and nutritionists.
- There are no regulatory impediments preventing insurers from recognising any category of allied healthcare provider identified in submissions as not recognised. Whether they choose to do so is a commercial decision for the insurer.
- Insurers appear to take into account a number of factors when deciding whether recognition of a new category of allied healthcare provider is commercially viable and in their members’ interests. While there is some variation in assessment frameworks across insurers, most claim to give primacy to the clinical efficacy of the service and any clinical risks. Most also have regard to member demand for services, the impact of recognition on administration and total claim costs (and hence insurance premiums), and whether recognition enhances the ability of the insurer to attract new members.
- Insurers’ assessments of clinical efficacy and risk are often fully or partly contracted out to an agency with specialist knowledge in this field and can be a costly process.
- When an insurer decides to recognise a particular type of allied healthcare provider they generally recognise that provider across their product range and make all members eligible for a rebate on the cost of their services (where that services is covered under their PHI product), irrespective of where they live in Australia.
- Allied healthcare providers did not appear to be aware of the factors employed by insurers in deciding whether to recognise healthcare providers.
The ACCC report concludes that more transparency is needed around the ways insurers decide which healthcare providers to recognise. As always, our advice is to do plenty of research and comprehensive comparisons before signing on with a particular health fund.