Termination of VMO contracts

Chapter 8 of the Health Services Act 1997 (the Act) governs the engagement of Visiting Medical Officers (VMOs) in NSW public hospitals.

The Act provides for the creation of the VMO Sessional and Fee-for-Service Determinations, which in turn outline the manner in which a VMO contract may be terminated.

Setting aside other factors such as AHPRA registration status changes, or changes in the VMO’s capability to provide the requisite services, the Determinations provide that a VMO contract may be terminated in the following circumstances:

1. Three months’ notice in writing given by either party (less by mutual agreement);
2. Four weeks’ notice given by the VMO following an unresolved dispute regarding the volume of services to be provided in the coming year;
3. Upon expiry of the contract term (there is no automatic right to reappointment without advertisement of the position); or
4. Immediately by the Local Health District (LHD) if the VMO engages in serious and wilful misconduct.

If a VMO’s contract is terminated for serious and wilful misconduct, the VMO may be listed on the NSW Health Service Check Register. This listing prevents the VMO from working in other NSW public hospitals until their name is removed from the register. The VMO may also be required to notify all private hospitals at which they hold accreditation.

Should a VMO wish to challenge a termination of contract decision under points 3 or 4, the VMO may in most circumstances appeal to the Minister for Health under section 106 of the Act. The Minister must appoint a Committee of Review (Committee) to determine the appeal. The Committee will typically consist of following four people:

1. An Australian lawyer of seven years’ standing;
2. A doctor nominated by AMA (NSW);
3. A doctor appointed by the Minister; and
4. A consumer representative appointed by the Minister.

A VMO doesn’t have a right of appeal in certain circumstances e.g. where their role no longer exists or has been replaced with a Staff Specialist position.

During the appeal, the VMO will present his or her case as to the reasons why the termination of contract decision should be overturned. One argument may be that the decision maker didn’t properly consider all available evidence relevant to the matter. Another argument may be that an investigation report relied upon by the decision maker was flawed. The VMO may be legally represented at the hearing with the consent of the LHD.

Following the hearing, the Committee will deliberate at length and provide a decision in writing as to the outcome of the appeal. Should the appeal be successful, the LHD is required to immediately reinstate the VMO. Should the original decision be upheld, the VMO may wish to seek professional advice as to whether judicial review of the Committee’s decision is available.

VMOs who have had their contracts suspended or terminated, or have concerns that this may happen, should contact both AMA (NSW) and their Medical Defence Organisation as soon as practicable.

Should you have any further questions regarding the termination of VMO contracts, please contact Andrew Campbell at 02 9439 8822 or andrew.campbell@amansw.com.au.

Please note that the above is not intended to be legal advice nor should it be relied upon as such. AMA (NSW) members are entitled to a no-cost 30-minute telephone consultation with one of our referral partners, which may be accessed by contacting the Professional Services team at 02 9439 8822 or professionalservices@amansw.com.au.

Insurer publishes erroneous billing information

AMA (NSW) was contacted by a concerned anaesthetist member regarding information that had
been provided to one of his patients by a private health insurance (PHI)company.

In an email to the patient, the private health insurer provided figures which purported to be the average out-of-pocket (OOP) costs for this doctor as well as 25 other anaesthetists in the region. The member noted that the average OOP expense quoted was significantly greater than what he normally charged.

The insurer’s email to the patient made the following statement about the fees of the anaesthetists living in the patient’s catchment area.

“From the review of this [sic] data this appears to be one of the most expensive regions we have…
The amount they are charging is
so far above anaesthetists anywhere else.”

AMA (NSW) reviewed the average OOP costs of some of the other anaesthetists named in the email. We learnt that the fees quoted by the insurer were of an order of magnitude 10 times greater than their actual fees. For example, one anaesthetist charged an average OOP of under $200 in the calculated period but was quoted by the insurer as charging well over $3,300 average OOP cost.

AMA (NSW) contacted the insurer, who admitted the error and committed to contacting the patient and all the anaesthetists involved to apologise for the mistake. The insurer had inadvertently published the total OOP costs charged to customers over a 12-month period. The insurer stated that the figures had been specifically generated for that customer and had not been published to any other customers or in any other forum.

This issue raises the broader question of the publication of specialists’ fees by PHI companies, and the risks posed by those companies who do not properly check their facts. This example only came to light because a concerned patient had contacted a doctor to discuss the figures.

Do you have any concerns regarding the publication of fees by PHI companies?