Gaps - Frequently asked questions

HBF has put together some answers to the most frequently asked questions regarding gaps.

What advice is the HBF Helpline providing to Patients and Doctors?

1. Patients
   The HBF call centre and branches are providing members with general information about HBF's gap solutions. The call centre and branches are also able to inform a member if the doctor that he/she is enquiring about is fully covered by HBF's standard gap solution. The call centre and branches do not provide the names of fully covered doctors nor do they provide any information to members regarding the individual billing practices of doctors.
   
   HBF does not direct patients to fully covered medical practitioners and does not consider it appropriate to do so.
   
   
2. Doctors
   The Medical Specialist Hotline in the call centre is providing information to specialists and GPs about HBF's gap solutions. The hotline is able to inform GPs whether the doctor that he/she is enquiring about is fully covered by HBF's standard gap solution. The hotline does not provide any information to GPs or specialists regarding the individual billing practices of doctors. should doctors whish to discuss their own billing profile, HBF's Medical Gap Project Office is available on 9265 6583.

What are the details of HBF's criteria?

HBF's objective was to cover as many doctors as possible. We have an estimated budget for the Medical Gap, which can be accommodated within current premium levels. Individual doctors have a range of fees for various item numbers. Those doctors who on average have lower fees were covered. The only criteria used were billing practices. The cut off was determined by coverage of at least 70% of all item numbers. This is what the budget allowed.

What statistical information does HBF have on individual doctors and disciplines?

Currently all health insurers are required to pay a benefit of 25% of CMBS for every inpatient medical service on which a Medicare rebate is applicable. Consequently for every inpatient medical service rendered to an HBF member HBF holds all billing details.

What is HBF's expectation on the take up rate?

1. Gap Saver - we would expect over time (say 2 years) to achieve 25% of members
2. Gap Extra - 5%-10% of members

We would wish that the majority of members had either one or both products.

How was 70% determined?

We surveyed all of our members on the issue of the gap and sought their advice on how we could best meet their needs. Some 60,000 of them returned the questionnaire with the greatest majority indicating they were not prepared to increase their premiums to cover the gap. We then determined the amount of money we could pay in gap benefits within these financial constraints. This provided us with a "budget" which we then applied to medical practitioner's current billing practices to determine the number we could cover. That "budget" resulted in approximately 70% of practitioners being covered. If a doctor is currently fully covered and continues to charge along the same profile HBF will continue to fully cover the fees.

Is it 70% of medical practitioners in each discipline eg, Neurosurgery, Orthopaedics, Anaesthetics or 70% of all medical practitioners?

HBF has endeavoured to cover 70% of medical practitioners in each and every discipline.

What are the specific criteria HBF has used to determine whether an individual doctor is in the 70%?

• Is the criteria based purely on the individuals average private hospital in-patient charge?
• Has HBF included analysis of fees raised in public hospitals in determining whether a doctor is a preferred practitioner? What rights of appeal does a doctor have against not being a preferred doctor?
• Are doctors advised of why they haven't been accorded preferred status, why they failed, and what exactly they have to do to be preferred?

HBF based the decision on whether an individual doctor would be fully covered or not solely on the billing profile of the individual. The billing profile is based only on the fees for services that have been provided to HBF members whilst as inpatients or day patients. If an HBF member were a private patient at a public hospital the fees of that the doctor charge would have been included in his/her individual billing profile. For a doctor who is not fully covered to be fully covered would require a reduction in his/her overall billing profile. Any medical practitioner who would like to investigate this option is able to contact our Medical Gap Project Officer on 9365 6583. She will then assist the medical practitioner to determine the level of reduction required. This process may take up to one month.

Medical Practitioners have been advised that they are either fully covered or not fully covered according to their billing profile and HBF's budgetary constraints. We are not applying a "preferred status" to any medical practitioner. If a medical practitioner wishes to be fully covered they will have to consider a reduction in fees which can be discussed with our Medical Gap Project Officer.

Why should a patient with the same policy eg Standard Gap Cover who pays the same premium gets a different rebate? Isn't ths discrimination?

The purpose of our standard gap cover is to fully cover the medical gap for as many of our members as possible in such a way that enables medical practitioners to retain their clinical and billing independence.

We believed this was best achieved by the methodology we adopted rather than one which dictates a set of benefit level which practitioners must adhere to in order for his or her patients to be fully covered.

We do believe our solution ensures the GP and the specialist can continue to determine the most appropriate treatment while at the same time provides certainty in cover to our members. Whether one member receives a higher benefit than another is not of great concern to them - after all it happens all the time. For example, one member may have a hospital stay of three days and another four for the same service due to their medical needs.

What is important is that they receive the treatment they need from the practitioner of their choice and are either fully covered for the medical gap or have the opportunity to be fully covered (through our other gap products).

Some doctors have not received a letter, why not?

HBF sent a letter to medical practitioners on 28 February 2000 informing them if they were fully covered or not by HBF's other gap solutions. Medical practitioners on HBF's mailing list were those who had performed more than 10 inpatient services during the 1998/99 financial year for HBF members. The reasons some doctors may have not received a letter may be because they performed less than 10 services. If any doctor has not received a letter from HBF we would ask them to call our Medical Specialist Hotline (1300 363 310) and inform us so that we can investigate. We also sent a letter to all GPs informing them of HBF's gap solutions and that our Medical Specialist Hotline is available for them to enquire if medical practitioners are fully covered by HBF's standard gap solution.

Why have Joondalup doctors been written to?

HBF wrote to all medical practitioners who had performed more than 10 inpatient services to HBF members as private patients during the 1998/99 financial year regardless of where those services were performed.

What bearing does the doctors initial consultation fee charge have on being included/excluded from the 70%?

The basis for our analysis has only been fees rendered to HBF members while as an inpatient at a private hospital or a public hospital (in this case they must have been admitted as a private patient). Therefore the initial consultation currently has no effect unless it was carried out after admission and discharge. In those instances where the initial consultation was held when admitted it will be included in the calculation together with every other bill, and consequently the effect it has would vary depending on the individual practitioners changing habits and profile of services.

What bearing does the doctors level of discount and "real" fee have of being included/excluded from the 70%?

A doctors real fee and the level of discount has a significant bearing on a doctor being included or excluded from the 70%. Our analysis has been based on the information as described in question 3. That is, the fee charged by the medical practitioner. HBF is aware the discounts may not have been recorded ie. the non-discounted fee was used in the analysis. We are happy to review cases where our analysis has been based on the full fee rather than the discounted fee.

How will new doctors or imports be assessed?

They will be asked to submit their fees schedule for review. If the billing profile is appropriate they will be covered.

What is the HBF Schedule of Fees - what are the levels of each item? How were they determined?

HBF believes that medical practitioners need the flexibility to charge as they have in the past. So instead of setting a 'schedule of benefit' HBF decided to recognise this and developed its solution whereby it is the medical practitioner's overall billing profile that determines whether their patients are covered.

In order to provide additional certainty for our members, GapExtra has a schedule of benefits so that medical practitioners not covered by our standard gap cover and their patients (with GapExtra cover) know exactly how much the HBF benefit will be for a particular item.

The GapExtra Schedule for individual doctors is available to them on request.

Has the proposal been designed to comply with the existing legislation as distinct from the amendments currently before Parliament?

The regulations to allow this proposal were discussed with the Department of Health and Family Services in Canberra prior to submission. We submitted our regulations and they have raised no issues with HBF's compliance to the current legislation.

How does a doctor currently outside of the 70% ensure they are added?

For a doctor who is not fully covered to be fully covered would require a reduction in his/her overall billing profile. If any medical practitioner would like to investigate this option they are able to contact our Medical Gap Project Officer on (08) 9265 6583. She will then assist the medical practitioner to determine the level of reduction required. This process may take up to one month.

What happens if all doctors sought to be included in the 70%?

If doctors outside the 70% changed their billing profile to the levels of doctors currently covered by HBF would cover them. It is possible that 100% of doctors would be covered.

However, with the availability of other gap products, particularly GapSaver we believe it is unlikely that 100% of doctors would decide to be covered by the standard gap cover.

What is the expected effect on premiums over the next 5 years?

HBF does not make detailed forecasts more than one financial year beyond the current one. We find that utilisation fluctuations beyond that period are highly variable (declining some years, increasing up to 10% in others).

What effect does HBF believe standard gap cover will have on referral patterns?

Cost is only one criteria although an important one - in choosing a doctor. Generally, other factor s such as reputation will be at least as important.

Members (patients) may wish to see a different doctor if the original doctor is not covered. This would depend upon other things such as whether they have GapSaver or GapExtra and whether the cost of the medical gap was a major consideration for them. The introduction of GapSaver and GapExtra was designed to give members a very financially attractive mechanism by which they can accumulate benefits to give them complete choice in terms of specialist and hospital.

What advice is HBF giving to patients, general practitioners and hospitals?

1. Patients
   The HBF is providing members with general information about HBF's gap solutions. HBF will also inform a member if the doctor that he/she is enquiring about is fully covered by HBF's standard gap solution. HBF is not providing the names or a list of fully covered doctors. HBF is not providing any information to members regarding the individual bulling practices of doctors.
   
   
2. General Practitioners
   GPs are able to call our Medical Specialist Hotline which provides information to GPs about HBF's gap solutions. The hotline is able to inform GPs whether the doctor that he/she is enquiring about is fully covered by HBF's standard gap solution. The hotline does not provide any information to GPs regarding the individual billing practices of doctors.
   
   
3. Hospitals
   Hospitals have been informed of HBF's gap solutions. No further information has been provided to hospitals, such as whether their own accredited doctors are fully covered or not.

Why shouldn't the AMA oppose Standard Gap Cover?

The AMA must make a judgement as to whether the efforts HBF went through to consult the medical profession and members in the development of the solution has been sufficient to indicate our willingness to both take advice and improve the solution over time.

We have continually emphasized the fact that our solution does not satisfy 100% of the demands of practitioners and members.

We were committed to launching gap cover that satisfied the majority knowing that continual improvement was both desired and planned.

We certainly hope that HBF has demonstrated its willingness to consult and that sufficient trust has been built up between HBF and the health industry to continue to allow us to discuss issues and concerns together. Over time the HBF solution should be able to be improved through consultation. In general the HBF solution including GapSaver and GapExtra provide a much more positive environment for doctors than the previous situation. And HBF has agreed to increased fees annually as per a medical inflation index.

Why shouldn't the AMA take up concerns over HBF market dominance with the ACCC?

In answering this question we must first agree on some basic principles:

1. We are not requiring medical practitioners to change. They do not have to bill us, agree to charge a set fee or change their treatment decisions.
2. We are also not paying a benefit to practitioners.

What we are doing is increasing the benefit for those members who have either purchased GapSaver or GapExtra or who are treated by a practitioner that fell within our budget restrictions - and in such a way that supports the clinical and billing independence of practitioners. We do not believe this would be an issue the ACCC would have concerns with.

Many doctors have discounted their fees to support the private health industry. They charge considerably less than some doctors who are included in the 70% yet if they increase their fees to levels similarly to other doctors within the 70% their patients will be rebated at the CMBS only compared to if they go to another 70% doctor who charges more.

1. Will HBF be directing patients to cheaper doctors in the 70%?
   See answers to previous questions. HBF is not directing members (patients) to doctors. We are only informing members whether a medical practitioner that they enquire about is fully covered or not.
   
   
2. Will HBF be giving out names of surgeons
   a. In order of their charging patterns
   b. By location relevant to the patient
   c. On a random basis
   d. According to set criteria.
   If so what are these.
   
   HBF's call centre and branch staff are able to inform a member if the doctor that he/she is enquiring about is fully covered by HBF's standard gap solution. The call centre and branches do not provide the names of fully covered doctors nor do they provide any information to members regarding the individual billing practices of doctors. In fact neither our call centre nor branch staff have access to information about the individual billing practice of doctors.
   
   HBF does not direct patients to fully covered medical practitioners and does not consider it appropriate to do so.

Doctors charges vary between patients and by procedure. A surgeon may be at the upper end of the 70% and charges a high fee for a particular procedure. A surgeon who is outside of the 70% may charge a lower fee for a particular procedure than the other doctor yet the patient won't geta full rebate or if enquiring with HBF call centre be directed to a surgeon who charges a higher fee for the particular procedure.

1. Is this discrimination?
   
   Firstly, HBF's call centre does not direct members to surgeons. We are not sure what this part of the question is asking.
   
   The purpose of our standard gap cover is to fully cover the medical gap for as many of our members as possible in such a way that enables medical practitioners to retain their clinical and billing independence.
   
   We believed this was best achieved by the methodology we adopted rather than one which dictates a set benefit level which practitioners must adhere to in order for his or her patients to be fully covered.
   
   We do believe our solution ensures the GP and the specialist can continue to determine the most appropriate treatment while at the same time provides certainty in cover to our members.
   
   
2. Is this abuse of market power under the Trade Practices Act. What discussion with the ACCC has HBF had this year on its specific products?
   In answering this question we must first agree on some basic principles:
   
   
   • We are not requiring medical practitioners to change. They do not have to bill us, agree to charge a set fee or change their treatment decisions.
     
     
   • We are also not paying a benefit to practitioners.
     
     What we are doing is increasing the benefit for those member who have either purchased GapSaver or GapExtra or who are treated by a practitioner that fell within our budget restrictions - and in such a way that supports the clinical and billing independence or practitioners.
     
     We do not believe this would be an issue the ACCC would have concerns with.
     
     
3. Is it an Equal Opportunity Issue?
   No.
   
   
4. Is it simple, fair, equitable or affordable - the corner-shop principles HBF has suggested underpin its approach?
   We recognised that without the support of the doctors we would not be able to solve the gap problem for our members. That is why we undertook such an extensive consultation process - and why our solution:
   
   
   • Does not interfere in the clinical decision of medical practitioners.
   • Does not require medical practitioners to make any changes to their billing practice.
   • Consists of two additional products, GapSaver and GapExtra, that allows members to have higher cover for all doctors.

Surgery and associated after care involves a number of medical practitioners, surgeons, anaesthetists, possibly an assistant, physician etc. The surgeon may be a 70% surgeon, the anaesthetist and others may not? What does HBF advise patients who enquire about the surgeon and the anaesthetist where one is covered but the other is not?

We simply advise the member that one medical practitioner is fully covered and that the other medical practitioner is not fully covered.

It appears from anecdotal evidence that HBF has been categorising doctors as "in" or "out" based on incomplete or inaccurate data including use of surgery consultation items not relevant to inpatient care and not taking into account the doctors fee for payments within say 7 or 30 days which might qualify for being "in". Please comment.

Currently all health insurers are required to pay a benefit of 25% of CMBS for every inpatient medical service on which a Medicare rebate is applicable. Consequently for every inpatient medical service rendered to an HBF member HBF holds all billing details.

As the basis for our analysis has only been fees rendered to HBF members while as an inpatient at a private hospital or a public hospital (in this case they must have been admitted as a private patient) it is difficult to see how we could have included "surgery consultation items not relevant to inpatient care".

If the information provided to HBF does not reflect the level of discount then our analysis would only reflect the full fee, not the discounted fee. HBF is aware that discounts may not have been recorded ie the non-discounted fee was used in the analysis. We are happy to review cases where our analysis has been based on the full fee rather than the discounted fee.

Where a doctor who was "out" should have been "in" has suffered damage re: referrals, reputation, income loss etc based on inaccurate information, what will HBF do?

HBF purposely made our gap cover effective one month after the announcement to enable medical practitioners the time to contact HBF if they had concerns. We have, and will continue to discuss with individual medical practitioners any concerns that they may have about how we assessed their billing profile etc.

A theatre service may involve anything from one major to many procedures eg. endoscopes, etc. Commonly four or more elective procedures may be performed between the surgeon and the one anaesthetists. Patients on the list may be insured with HBF, Medibank Private, HIF, AXA etc or be self insured.

1. Does HBF believe doctors should charge according to the patients insurance cover?
   HBF solution ensures that doctors retain their ability to set their own fees. We do not believe doctors should charge according to the patients insurance cover.
   
   
2. Is a patient who is covered for the surgeon's fee but not for the anaesthetist being advised:
   
   a. To seek another anaesthetist;
   b. Being given the names of anaesthetists who are covered; or
   c. Surgeon/anaesthetist teams who are covered.
   
   
   HBF is providing members with information about whether the medical practitioners they are enquiring about are fully covered. We are not providing a list of medical practitioners who are fully covered.

What effect does HBF believe Standard Gap Cover will have on patient preference, GP referrals, surgeon/anaesthetic relations, and medical fee levels?

1. Patient preference
   Cost is only one criteria although an important one - in choosing a doctor. Generally, other factors such as reputation will be at least as important.
   
   Members (patients) may wish to see a different doctor if the original doctor is not covered. This would depend upon other things such as whether they have GapSaver or GapExtra and whether the cost of the medical gap was a major consideration for them.
   
   The introduction of GapSaver and GapExtra was designed to give members a very financially attractive mechanism by which they can accumulate benefits to give them complete choice in terms of specialist and hospital.
   
   
2. GP Referrals
   GPs are able to call our Medical Specialist Hotline, which provides information to GPs about HBF's gap solutions. The hotline is able to inform GPs whether the doctor that he/she is enquiring about is fully covered by HBF's standard GP solution. The hotline does not provide any information to GPs regarding the individual billing practices of doctors.
   
   
3. Surgeon/Anaesthetic relations
   We have dealt with all medical practitioners as individuals and have not assessed whether they would be fully covered or not on anything other than their own billing profile.
   
   
4. Medical fee levels
   Our standard gap solution is based on medical practitioners continuing with their current billing profile (subject to the annual indexation to be undertaken with Access Economics). Keeping in mind that HBF has financial constraints we will monitor the billing profiles of fully covered doctors to ensure that we can continue to cover the medical gap for our members.

HBF have advised that GapExtra has a schedule of benefits for patients with GapExtra cover.

1. How has this schedule been developed?
2. What are the levels of benefit?
3. How will it be adjusted?

The HBF schedule is a list of medical practitioner services as described by the Commonwealth Medicare Benefits Schedule togther with an "HBF Derived Fee". This enables us to set the benefit for doctors who are not fully covered but are treating a member covered by GapExtra.

The GapExtra Schedule for individual doctors is available to them on request. Doctors who have requested schedule details have already been provided with information.

What degree of promotion will HBF be undertaking re: GapSaver and GapExtra to:

1. Doctors who are within the 70% and outside the 70%
   We regularly communicate with medical practitioners through our InTouch newsletter and we fully intend to continue doing so.
   
   
2. The public
   We wrote to all members with details of our gap solution. We also incorporated details of our products in all relevant brochures and all HBF staff have been trained so they can discuss the benefits of each of the products with both new and existing members. We fully intend to continue to present this opportunity to members wherever possible.

Why hasn't HBF promoted GapExtra and GapSaver before introducing Standard Gap Cover?

As you know, all health funds had to have no gap or known gap cover by 30 June in order for members to qualify for the 30% rebate as a reduction in their premiums.

Our solution consists of three elements, standard gap cover, GapExtra and GapSaver and they were launched at the same time for a number of reasons including:

• Cost of communication - we are very careful with our member's money and therefore advise members of new products or services at the same time to minimise expenditure. We advised our member of the gap solutions at the time of the rate increase to demonstrate the extra value they were receiving for their premium and because we were obliged to write to them anyway. To send another communication would incur a cost which is not acceptable to our members.
• The gap solution is a package and each component builds on the others. As GapExtra and GapSaver are designed to assist in covering the gaps for those practitioners not covered by our standard product to launch those components without members understanding the basic coverage would have been detrimental to their understanding and contrary to the directive they provided us with - which was to offer as many practitioners as possible without increasing premiums.

What effect do you believe HBF's new products will have on private insurance levels in the next 12 months and over the next 3 years?

Our members have told us that the medical gap has become the greatest impediment to the success of private health since the introduction of the 30% rebate. We are certainly hopeful that HBF's solution will have a positive effect on membership numbers due to the certainty it provides members with respect to the medical gap.

However the impact on membership will not only come from gap insurance but also from the impact of Lifetime Health Cover. We anticipate significant growth between now and 30 June 2000.

In light of the concerns that have been expressed, what changes in any has HBF made to its products?

We knew when we launched our solution that we could not satisfy every individual. However we trust you will agree that we have endeavoured to consult widely and where our information has not been complete we have continued to communicate.

An example of this is in the area of obstetrics where the information we received through the HIC did not accurately reflect the true billing profile of obstetricians. We learned that it was quite common practice for obstetricians to charge the medical gap component separate to the final bill - which is the one received by HBF.

That meant it was extremely difficult to determine which obstetricans should be fully covered. Additional information was therefore sought with some urgency to ensure our list of obstetricians was available to 1 April.

HBF is very open to suggestions as to how we can improve our solution, bearing in mind our cost constraints, and look forward to receiving those suggestions.