Bupa and Ramsay sign three-year contract

Bupa and Ramsay sign three-year contract

A last-minute agreement resulted in ongoing cover for Bupa-insured patients at Ramsay hospitals. However, the dispute emphasises the need for an independent, well resourced, statutory body (Private Health System Authority).

Ramsay Health Care and Bupa have recently been the subject of much attention after failed negotiations saw termination of their Hospital Purchaser Provider Agreement (HPPA), an agreement for Ramsay hospital services to Bupa-insured patients, on 2 August 2022.

Shortly after this agreement was terminated, and before any changes were due to come into effect for Bupa-insured patients, Ramsay and Bupa were able to successfully negotiate a new agreement. That new agreement has been finalised in terms of a three-year contract which was signed by Ramsay and Bupa on 19 August 2022. 

This three-year contract will ensure Bupa-insured patients continue to be covered when they access Ramsay hospitals for treatment, without additional out-of-pocket costs.

Background

The timeline of events relating to the Ramsay/Bupa negotiations are as follows:

• Early May 2022: Ramsay issued a notice to Bupa to terminate agreement after failed contract negotiations.

• 2 August 2022: The existing agreement between Ramsay and Bupa reaches an end. Transitional arrangements commenced to ensure cover for Bupa-insured patients undergoing certain types of treatment until various dates in 2023.

• 12 August 2022: Ramsay and Bupa reached an in-principle agreement on the terms of a new three-year contract.

• 19 August 2022: Ramsay and Bupa finalised and sign new three-year contract.

What’s changed?

As the new three-year contract was finalised before any changes were due to come into effect, Bupa-insured patients will continue to benefit from no additional out-of-pocket expenses when they attend a Ramsay hospital for treatment. 

Ramsay and Bupa have also confirmed that, as part of the agreement, a new Strategic Collaborative Committee will be established to develop initiatives which further expand the value of private health service offerings for their patients.  

Other health fund policy holders?

Ramsay continues to have agreements in place with all other Australian private health insurers. 

IFC and private hospital costs

Informed Financial Consent involves an open dialogue between patients and their medical practitioners (and/or practice staff, who often play a large role in providing IFC) about the fees and costs associated with their health care. This dialogue should always be driven by the treating medical practitioner.  

As a treating medical practitioner, provision of IFC should include provision of information to the patient about other health professionals or service providers (including hospital facilities and services) involved in delivering their care, and information about their anticipated fees (or contact details with which the patient can ascertain and confirm those fees). 

Treating medical practitioners and their practice staff should continue to take care to ensure patients are well-informed of anticipated out-of-pocket costs, including hospital out-of-pocket costs. All patients should be encouraged to contact their private health insurer once an estimate of fees has been provided. 

Top tips

Additional guidance to treating medical practitioners to avoid misunderstandings and fee shocks, includes: 

• Do not assume your patient is aware of the extent to which they will be covered by their private health insurance. Not only is there a good chance they do not know, but it is often the case that patients mistakenly believe that all their costs will be automatically covered by their private health insurance. Further, patients may not contemplate that gap arrangements between hospitals and private health insurers can influence out-of-pocket costs. 

• Do not avoid the conversation because you are unsure of the details. While you or your staff may be unsure of what additional out-of-pocket costs are associated with a patient’s hospital stay, encourage them to seek the information from the hospital or to their private health insurer.  

Conclusion

The AMA previously expressed its disappointment at the failed contract negotiations between Ramsay and Bupa, particularly given the current need to address the delays in treatment and elective surgery waiting lists caused by the Covid-19 pandemic. The AMA has expressed that private health insurance is critical in meeting this pent-up demand by supporting access to affordable private health care.  

AMA (NSW) is pleased to hear that an agreement has been reached for the benefit of patients, medical practitioners, private hospitals, and the ongoing viability of the private health system. 

Although a successful resolution was ultimately reached, the dispute between Ramsay and Bupa and its potential impact access to private health care emphasises the need to establish an independent, well resourced, statutory body (Private Health System Authority). The AMA stated this action is important to regulate the legal conduct of the private health insurance industry and, further, to ensure greater oversight of these types of contract negotiations so that disputes can be avoided. 

AMA (NSW) acknowledges there may remain some confusion following the changes above. For further clarification, including with respect to IFC responsibilities, members are encouraged to contact
our advisory team on +61 2 9439 8822 or workplace@amansw.com.au for free advice and support.

Contributed by AMA (NSW)’s Workplace Advisor (Legal & Policy), Melanie Fayad.