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 contract continues to apply. There are no impacts for patients at our hospitals, no impacts for Healthscope and no changes to how our hospitals currently operate. The termination date of the AHSA contract and the last day of the notice period is Monday 3 March 2025.
2. Transitional Period
Once we reach the termination date, the transitional period will commence the following day, Tuesday 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 AHSA health fund members.
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 AHSA health funds.
In practice, what this means is that:
- Members of 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;
- It is likely that the funding from AHSA health funds to Healthscope will reduce, and we will be left with no choice but to put a fee in place to cover this funding gap.
- Once we know what AHSA health funds will pay, our hospitals 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.
Is it correct that I can avoid the additional out of pocket fees if I change my health fund? How?
Yes. 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.* 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 Bupa, HCF, Medibank and NIB.
If I stay with an AHSA health fund, what will my future out-of-pocket costs be?
We won’t know what these costs might be until AHSA funds advise us the amount they will to pay for their members’ treatment beyond this date. We expect this to happen just before the current contract comes to an end on Monday 3 March 2025.
Under guidelines set by the Private Health Insurance Ombudsman, doctors, hospitals and health funds are expected to work together to provide information to you about the costs associated with your treatment, and any private health insurance benefits payable, prior to your admission to hospital.
