Doctors demanding secret gap fees could be breaking the law

Hundreds of thousands of health fund members are being charged possibly illegal gap fees on the quiet by doctors, a survey has found.

Exclusive: Greedy doctors who demand patients pay hundreds of dollars in secret and possibly illegal “booking fees” for private surgery have been exposed by a government taskforce led by the nation’s top doctor.

A survey of 6000 health fund members conducted for the taskforce has also found one in every two people who used their health insurance paid legal gap fees to doctors, four times as many as official government data shows.

And two per cent of the gap fees charged by doctors were considered “egregious”, so high (up to $16,000 in one case) other medicos can’t support them.

The medical gap fee crisis is driving people to dump their health cover and forcing them to raid their superannuation to pay for medical care.

More than 15,000 people a year are being forced to raid $290 million from their superannuation to pay for medical care not covered by health funds or Medicare.

The latest government figures released today show health fund membership slumped by 12,370 people in the three months to December 2018.

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Health fund membership continues to slide. Picture: iStock

Health funds are predicting unless more is done to reform the system and tackle gap fees, membership levels will sink to an unsustainable 30 per cent by 2030.

News Corp Australia can reveal the taskforce found hundreds of thousands of patients, one in 12, are being hit with brown paper bag booking fee payments that have been kept secret from health funds and that are not recorded in the government’s official gap payment data.

There is a possibility they could be illegal because they breach the no gap arrangements doctors have with health funds.

Under these rules, doctors get a higher rebate from the health fund if they agree to cap their fees at a certain level so patients don’t get surprise out of pocket expenses.

To get around these rules doctors ask patients to pay an upfront “booking fee” before the surgery and to keep that payment secret from their health fund because it won’t be rebated.

Australia’s top doctor Chief Medical Officer Professor Brendan Murphy is running the taskforce that uncovered the extent of the crippling gap fee payment crisis.

Chief Medical Officer Professor Brendan Murphy. Picture: AAP

The new research has exploded official government data which has for years played down the true extent of medical gap fees.

Figures collected by the Australian Prudential Regulation Authority show only 12.5 per cent of medical services covered by health funds involve a gap payment.

The new survey shows in fact 44 per cent of patients using private insurance faced a gap fee.

Anaesthetists were found to charge patients the highest gap fees, the survey found.

Health fund spokeswoman Dr Rachel David said research showed consumers were much happier about paying gap fees if they knew about them in advance.

Unexpected gap fees were a key reason so many Australians were dumping their health cover and there was clearly consumer demand for a website or tool to provide greater transparency about medical fees, she said.

The new research has exploded official government data which has for years played down the true extent of medical gap fees. Picture: istock

Consumers Health Forum chief Leanne Wells said the 44 per cent figure was “disturbing”.

“As our CHF survey last year showed, there are numerous cases of people paying thousands of dollars for cancer treatment and other procedures. This figure highlights the need for much more transparency on the overall impact of out of pocket costs.”.

More than 17 months ago Health Minister Greg Hunt charged Professor Murphy with tackling the problem of medical gap fees — a long-held gripe of health fund members — as part of his private health reforms.

Consumer groups and health funds were hoping the government would establish a government website where doctors would have to display the fees they charged to increase competition and drive down charges.

That website was expected to be launched before Christmas.

Opposition health spokeswoman Catherine King said the failure to deliver a solution by Christmas was another broken promise.

“That’s what happens when you impose a six-year freeze on the Medicare rebate: doctors charge more to make up for their lost income. And that’s what happens when you fail to improve the value of private health insurance,” she said.

Originally published as Doctors demanding secret gap fees could be breaking the law