Media releases

September 8, 2000

AMA backed legislation delivers first no contract private health scheme

The President of the Australian Medical Association, Dr Kerryn Phelps, today welcomed the first major health insurance scheme under the AMA sponsored no contract gap legislation.

"This new scheme from Medibank Private represents a major step forward in the AMA's campaign to ensure that doctors do not have to enter into managed care type contracts in order to provide services to patients under the no gap or known gap basis covered by private health insurance."

"The new product is not perfect from the AMA's point of view, however we have had productive discussions with Medibank Private which have lead to significant redevelopment of the initial proposals from the AMA's point of view", Dr Phelps said.

"'The AMA and Medibank Private initially disagreed on two aspects. Medibank Private wanted doctors to bill the fund, not the patient and have insisted on a financial cap per episode regardless of how many doctors are involved. This cap could discriminate against patients with complex medical problems.

Dr Phelps said that Medibank Private has now decided that there will be an option for the bill to be sent to patients, and that the fund will again examine the issue of the per episode gap as part of an overall review in November.

"These important developments arose from the AMA's negotiations with Medibank Private and we look forward to putting very strong and legitimate arguments against the episode gap approach at the November review."

Medibank Private is, of course, entitled to make its own decisions about the its schemes. The AMA is encouraged by its willingness to engage in productive discussions with the Association over our genuine concerns for the well being of our patients.

While we obviously remain concerned about the episode cap this, is still a ground breaking scheme. This is the first gap insurance scheme offered without a contract.

Medibank Private has acknowledged the concerns the medical profession has with contracts and they should be congratulated for this new scheme.

In the United States contracting is the basis of the managed care system which health insurance companies can ration care by controlling the way doctors treat patients. The AMA sponsored legislation and the new Medibank Private scheme will help to prevent Australia going down this very damaging path for patients and doctors.

We will encourage all other health funds to similarly develop patient friendly, no contract gap insurance schemes Dr Phelps said.

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