Media releases

August 6, 2015

Medibank deeply disappointed as Calvary Health Care says “no” to contract terms agreed with other hospital groups

  • Calvary asked for higher payments than other hospitals and declines to partner with Medibank to reduce ‘unfortunate’ hospital mistakes
  • Medibank and ahm members’ cover isn’t affected and they can still be treated at Calvary hospitals, but Calvary can charge members additional out of pockets costs if it chooses
  • Medibank outlines special arrangements at Calvary hospitals to reduce impact on our members 

Medibank is deeply disappointed that Calvary Health Care (Calvary) has been unwilling to accommodate Medibank’s request to share the load of keeping healthcare affordable for our members, while also improving our members’ healthcare experience.

Medibank has been negotiating with Calvary in good faith for 5 months trying to agree a contract that improves healthcare outcomes and reduces avoidable costs. In these negotiations Medibank sought to reduce unfortunate mistakes that can occur in hospitals related to medication errors, surgical complications, falls in hospital and hospital-acquired pressure sores. 

Unfortunately, despite protracted negotiations and a mediation process conducted by the Private Health Insurance Ombudsman, the two parties have been unable to reach agreement and as a result, Medibank’s contract with Calvary will expire on 31 August 2015.

When the contract expires, Medibank and ahm members will still be able to be treated at Calvary hospitals but Calvary will be able to charge members additional out of pocket costs if it wishes.

Medibank and ahm members’ health cover does not change, and they will still be able to be treated by their chosen doctor at Calvary hospitals and Medibank will continue to pay a large proportion of their costs. 

Calvary will, however, be able to charge members additional out of pocket costs if it chooses to. Members should contact Medibank straightaway if this occurs. 

Special arrangements have been put in place to assist Medibank and ahm members who may be planning treatment at Calvary hospitals over the next few months. 

Medibank and ahm members who are pre-booked for treatment before 31 August 2015, or already undergoing treatment for pregnancy or chronic conditions prior to that date, will have the benefit of extended periods of cover under the existing contract terms. That is:

  • nine months if the pre-booking is for pregnancy care
  • six months if the pre-booking is for a chronic condition
  • two months for other pre-booked procedures. 

In addition, Medibank has made special arrangements to cover any out of pocket hospital costs that members may be charged by Calvary for admissions up to 31 October 2015. 

All Medibank and ahm members within Calvary hospital catchment areas will receive a letter via email or post explaining these special arrangements. Medibank and ahm members who may be affected are also encouraged to call Medibank on 132 331 or ahm on 134 246, visit one of our retail stores or www.medibank.com.au/health-insurance/calvary/, or speak to their doctor to discuss their options.

The measures Medibank was seeking to agree with Calvary to reduce the unfortunate mistakes that can occur in hospitals were modest and in line with Medibank’s agreements with other hospitals. 

Many of these mistakes are avoidable and can be prevented with the right focus and effort from everyone involved. 

“We have not made this decision lightly,” Dr Andrew Wilson, Executive General Manager - Provider Networks and Integrated Care, Medibank said.  “While other hospitals have been willing to partner with us to share the load to help keep healthcare affordable and improve our members’ healthcare experience, Calvary has continued to ask for payments significantly in excess of other hospitals.” 

“Calvary has also been unwilling to agree a number of measures designed to reduce the unfortunate mistakes sometimes occurring in hospitals that result in poor healthcare outcomes for our members and are costly for the overall health system.”

“Medibank has paid ‘above market rates’ to Calvary for a number of years, and unfortunately this situation cannot continue. While we were hopeful for an agreement that would pave the way for a continued relationship between us, this outcome has regrettably left us with no other choice but to part ways,” Dr Wilson said. “We just hope Calvary eventually changes its position and decides to partner with us to help reduce these unfortunate mistakes and keep costs down - like so many other hospitals have done already.”

Ends

Media contact:

Colin Neathercoat on 0412 076 622

Members with queries:

Members with questions should contact us to discuss their options - Medibank on 132 331 or ahm on 134 246, or visit our retail stores or www.medibank.com.au/health-insurance/calvary/


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