General information
What has happened?
Despite extensive negotiations, Healthscope has been unable to agree fair commercial terms with Bupa and the health funds which are members of the Australian Health Service Alliance (AHSA).
In late November, we gave Bupa and AHSA health funds notice that our contracts with them will terminate. What this means is that we are now in a notice period and the health fund contracts continue to apply. There are no immediate impacts for patients at our hospitals.
We are continuing to negotiate with Bupa and the AHSA. We are trying to agree new contracts which mean their members don’t have to pay additional fees for treatment in our hospitals. If new agreements can’t be worked out, there may be additional costs for patients from Friday 21 February 2025 for Bupa and Tuesday 4 March 2025 for AHSA funds.
We are aware of the impact this is likely to have for our patients who are Bupa or AHSA health fund members. The last thing we want to do is impose any additional costs on patients during a cost of living crisis. We remain ready as always to negotiate a fair funding agreement with both Bupa and the AHSA health funds that properly and sustainably addresses the rising costs facing private hospitals moving forward to avoid Bupa and AHSA health fund members having to pay additional fees for treatment in our hospitals.
Why has this happened?
Healthscope and the rest of the private health sector continues to face significant financial challenges and increasing costs. There are a number of reasons for this, including the fact that many private health insurers are not funding hospitals fairly and sustainably.
Unfortunately, Bupa and the AHSA health funds were not offering funding that is sufficient for Healthscope to sustainably offer quality health care going forward, so we gave them notice that our contracts with them will terminate.
This is a disappointing outcome, and certainly not our preferred option. It is an unprecedented step, but something has to change to secure the future of private hospitals. The only long-term solution is an industry solution, with hospitals, governments and doctors forcing private health insurance companies to appropriately fund the cost of patient care.
We will continue to negotiate with Bupa and AHSA health funds in the hope of reaching an agreement that removes the need for their members to pay additional out-of-pocket costs, and that fairly and sustainably funds our hospitals now and into the future.
This issue only affects Bupa and AHSA health fund members. Patients who are members of other funds are not impacted. Healthscope has agreements in place with all other major Australian health insurers including HCF, Medibank and NIB.
Which funds are affected?
This only impacts Bupa and AHSA health funds. AHSA funds include:
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NOTE: the ADF Bupa agreement is separate and will not be impacted by Healthscope going out of contract with Bupa.
What do ‘notice period’, ‘transitional period’ and ‘out of contract’ mean?
When a notice of termination of a contract has been given to a health fund, there are three stages that generally apply. These stages determine if the terms of the contract will still apply and what, as well as when, additional out of pocket fees may be payable by patients. The three stages are:
- Notice Period
- Transitional Period
- Out of Contract
More details about what happens in each period are below.
1. Notice Period
Termination notice has been given. The parties are now in the notice period, which starts when termination notice is given and continues until the agreed termination date of the contract.
During the notice period, the health fund contracts continue to apply. There are no impacts for patients at our hospitals, no impacts for Healthscope and no changes to how our hospitals currently operate.
- For Bupa, the termination date of the contract and the last day of the notice period is 20 February 2025.
- For AHSA health funds, the termination date of the contract and the last day of the notice period is 3 March 2025.
2. Transitional Period
Once we reach the termination date, the transitional period will commence the following day.
- For Bupa, the first day of the transitional period is 21 February 2025.
- For AHSA health funds, the first day of the transitional period is 4 March 2025
During the transitional period, the hospital and the health funds have agreed that the terms of the contract will continue to apply to certain patients and for a certain duration (these are sometimes referred to as transitional arrangements). The table below outlines the circumstance and the duration in which the transitional period will apply to Bupa and AHSA health fund members.
Transitional arrangements apply on and from (21 February 2025 for Bupa members and 4 March 2025 for AHSA fund members)
During the transitional period, the hospital and the health funds have agreed that the terms of the contract will continue to apply to certain patients and for a certain duration (these are sometimes referred to as transitional arrangements). The table below outlines the circumstance and the duration in which the transitional period will apply to Bupa and AHSA health fund members.
1 Emergency admissions: the current contract arrangements and payment schedules continue to apply for a continuous period of three months. Emergency admission (in absence of any agreement) will include any of the following:
- At risk of serious morbidity or mortality and requiring urgent assessment and resuscitation.
- Suffering from suspected acute organ or system failure.
- Suffering from an illness or injury where the viability of function of a body part or organ is acutely threatened.
- Suffering from a drug overdose, toxic substance, or toxin effect.
- Experiencing severe psychiatric disturbance whereby the health of the patient or other people is at immediate risk.
- Suffering from severe pain where the viability or function of a body part or organ is suspected to be acutely threatened.
- Suffering acute significant haemorrhaging and requiring urgent assessment and treatment.
- Patient requires immediate admission to avoid imminent morbidity or mortality and where a transfer to another facility is impractical.
2 Course of treatment: all patients undertaking a course of treatment (e.g., chemotherapy, dialysis, psychiatric, rehabilitation) for a continuous period of up to six months. Course of treatment is not limited to the examples listed here.
3 Maternity pre-bookings: if a booking has been received by the hospital prior to the contract termination date, including bookings notified by the doctor. If a pre-booked mother has a baby or multiple babies requiring admission to a special care nursery, this would be covered at the current contract rates. There may be exceptions where the baby requires ongoing treatment after being discharged from hospital. This would be deemed a separate admission and the rates payable would need to be confirmed with the AHSA and Bupa.
4 Non-maternity pre-bookings: if a booking is received by the hospital prior to the contract expiration date, including bookings notified by the doctor or where the patient has completed the necessary forms. Admission must occur within six months of the contract expiration date.
If you are a patient who is a Bupa or AHSA health fund member and you:
- meet the criteria in the table above, you will not be required to pay additional out of pocket fees;
- do not meet the criteria in the table above, it is likely that you will be required to pay additional out of pocket fees.
3. Out of Contract
When a patient does not meet the transitional period criteria, or at the end of the transitional period noted above, Healthscope is out of contract with the health fund. This means the terms of the contracts will no longer apply to patients who are members of Bupa or AHSA health funds.
In practice, what this means is that:
- members of Bupa and AHSA health funds are still welcome to be admitted at our hospitals to receive treatment. The care, quality and standard of treatment will remain unchanged;
- Bupa and AHSA health funds will decide on the amount they will pay in to the hospital for the treatment received by their members;
- the level of additional out of pocket fees that a member may be required to pay at our hospitals will depend on what Bupa and AHSA health funds pay and the hospital’s cost of providing that treatment;
- once hospitals know what Bupa and AHSA health funds will pay, the hospital will provide health fund members with full informed financial consent. This is information that explains the fees these health fund members will be responsible for paying to the hospital.
How can patients avoid extra fees?
Australia’s private health insurance laws allow members to move their cover to another health fund without re-serving waiting periods when transferring to a comparable product. Bupa and AHSA health fund members can avoid additional fees if they switch to a comparable product with another fund that has the same level of benefits and same conditions as their current product.* Healthscope has agreements in place with all other major Australian health insurers including HCF, Medibank and NIB.
* Private health insurance is complex and it can be difficult to compare health insurance products. You should discuss your health insurance needs with the fund you are proposing to switch to so that you understand the new product, how it differs from your current product and can confirm that the product is right for you.
Make sure you consider the products excess, co-payment, full cost and all out of pocket expenses that will apply in the event you require treatment at a hospital. You should also consider if you are obtaining a comparable product. If you switch to a comparable product with another fund that has the same level of benefits and same conditions as your current product, you will not have to re-serve any waiting periods that have already been served.
You can compare funds for free at www.privatehealth.gov.au and choose a fund that is not affected.