Teachers Health has described Healthscope's decision to terminate an agreement covering its members as "irresponsible and unconscionable".
"The termination of our contract is not an outcome we are happy with. Unfortunately, there is no other alternative at this stage. We are especially disappointed as Teachers Health and Healthscope have enjoyed an amicable working relationship for over 25 years," it said.
In a statement, the not-for-profit and member-owned insurer said its contract with the Healthscope private hospital network recently came up for review.
It said, "Their proposed new arrangement would have resulted in an unacceptable and unfair increase in cost for our members.
"Healthscope's proposal also included additional fees to meet industry minimum standards for rehabilitation and mental health treatment. We want the best quality of care for our members and that’s why we expect industry minimum standards to be met as a baseline and without excessive additional fees. This opportunistic and exploitative behaviour demonstrates the lack of competition faced by Healthscope and its ability to make take it or leave it offers to health funds."
The insurer said the current COVID-19 pandemic makes it even more important its members are not used as a "bargaining tool".
"Due to this, we were unable to accept the excessive increases demanded by Healthscope and there are no longer agreed charges for our members attending a Healthscope hospital," it said, adding its members are likely to face a significant out-of-pocket gap to attend any of the 42 Healthscope managed hospitals.
"We believe Healthscope’s decision to terminate at this time is irresponsible and unconscionable. It unfairly targets Teachers who are already facing personal and professional challenges during COVID-19. Our members do not deserve this uncertainty while performing a vital role under difficult conditions."
Teachers Health said it is in the process of notifying affected members but that they can still access treatment at Healthscope hospitals before 8 June 2020.
"The ending of the Healthscope agreement doesn’t impact emergency hospital admissions up until and including 7 September 2020," it continued.
"Teachers Health has agreements with more than 500 other private hospitals across the country, for members that want to avoid the out of pocket expenses they will likely soon face at Healthscope hospitals. We regularly negotiate these contracts to help minimise out-of-pocket costs for our members.
"This decision to terminate has taken place only three weeks after the Federal Government’s commitment to protect Healthscope’s viability as a result of the COVID-19 crisis by providing significant financial support. Healthscope is now not only receiving taxpayer support but is also seeking to impose excessive increases on health funds. This is a fact that disappoints us even more while we try to protect our many members impacted by their decision."