Health funds call for ‘surprise billing law’ in response to higher costs for procedures

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Private Healthcare Australia has called for tougher laws to protect people from unexpected bills in the private health system, where 60 per cent of all elective surgical procedures occur.

The association says people should not held liable for any costs that are not disclosed up-front before medical treatment, with civil and criminal penalties for breaches.

It says new data shows the median out-of-pocket cost for Australians having common procedures funded by their health insurance has increased up to 300 per cent over the past five years.

The biggest increases have occurred in hospital fees for heart angiogram procedures and gastroscopies, where the median out-of-pocket fee has surged from $50 in 2017-18 to $200 in 2022-23.

Some procedures that previously attracted no out-of-pocket charges have now attract these costs. In 2017-18, most procedures had no out-of-pocket fee for cataract surgery or a cystoscopy. They now attract a $100 and $200 median out-of-pocket fee, respectively.   

CEO Dr Rachel David said there is currently no way of knowing if these out-of-pocket costs were fully disclosed to consumers before they had their procedures. However, anecdotal reports suggest some people are still getting shocked by bills worth hundreds of dollars after their treatment. These bills can come from the hospital, medical specialists, or pathology and diagnostic services they encountered.

“Australia needs to follow international best practice and introduce tough laws to protect consumers from surprise billing for healthcare services. For example, there was bipartisan political support for the ‘No Surprises Act’ in the US, where consumers can confidently proceed with healthcare knowing they won’t get a financial shock at the end,” she said. 

“Fifty-five percent of Australians are paying for private health insurance. These people are contributing to their own healthcare and taking pressure off our stressed public hospital system. They should be guaranteed protection from unanticipated costs.

“Inevitably, some procedures may result in unexpected complications, but a proper informed financial consent process ensures patients are made aware of this possibility prior to surgery.

“Ideally an up-front quote should be provided which includes all likely out-of-pocket costs from the providers involved in the patient’s care. If we can do it for car and home repairs, there is simply no valid reason why this can’t happen for medical treatment.”

“In the current cost-of-living crisis, we must do everything we can to reduce the cost of medical treatment for Australians who are increasingly relying on private health insurance to get fast access to private healthcare and avoid public hospital waiting lists," said Dr David.

Most hospitals have entered agreements with health funds to reduce out-of-pocket costs for their customers. Recently, there has been a decline in patients with private health insurance treated in hospitals without an agreement. However, day hospitals are not, on average, moving with this trend. Day hospitals charge patients significantly higher out-of-pocket hospital fees than other private hospitals.