Australia: The Private Health Insurance Ombudsman and Private Health Care Providers
The primary role of the Private Health Insurance Industry Ombudsman (Ombudsman) is to protect the interests of private health insurance customers (Ombudsman Act 1976 (Cth)(Act), s 20). The Ombudsman does this by managing complaints and conducting investigations.
The Ombudsman has traditionally focussed on the actions of private health insurers and their brokers, but the Ombudsman can also investigate and mediate matters involving health care providers in certain circumstances. They can do this at their own initiative, or in response to a complaint.
Responding to complaints about health care providers
The Ombudsman only has power to investigate complaints relating to a health care provider in certain circumstances. Specifically, the complaint must:
- be made by the right person – a consumer, private health insurer, another health care provider, or a broker
- be about the right thing – a private health insurance arrangement or other private health matter under the Private Health Insurance Act 2007 (Cth)
- satisfy at least one of the following: the complaint must also be made against a private health insurer; the complainant must be a private health insurer or a person insured under a private health insurance policy; if the complainant is another health care provider or a private health insurance broker, a private health insurer or a person insured under a private health insurance policy must also be a complainant, and
- satisfy the 'Special Health Care Test' –the complaint needs to be about the 'application of private health insurance arrangements to goods and services delivered, or products manufactured or supplied by that health care provider, or arrangements to which that health care provider was (or is) a party' (Act, s 20G(2)(a)).
Only when these four conditions are satisfied can the Ombudsman become involved. These limitations mean the Ombudsman does not have power to manage or investigate a complaint about:
- services not yet provided by a health care provider
- proposed private health insurance arrangements being negotiated between a private health insurer and a health care provider
- commercial terms of any negotiations between a health care provider and a private health insurer.
When managing complaints, the Ombudsman can:
- require the parties conduct mediation (Act, s 20J(1)(a))
- refer the complaint to the subject for investigation (Act, s 20J(10(b))
- investigate the complaint in certain circumstances, including if the Ombudsman is not satisfied with the outcome of mediation, or the outcome of an internal investigation by the subject of the complaint (Act, s 20P).
Independent investigations
The Ombudsman also has power to initiate their own investigations in certain circumstances (Act, s 20T). However, the Ombudsman can only investigate the practices of a health care provider if:
- the investigation relates to a matter arising out of, or connected to, a private health insurance arrangement, and
- the practices and procedures relate to one or both of: the application of the private health insurance arrangement to goods or services provided, manufactured, or supplied by a health care provider; or a private health care arrangement to which the provider is or was at the relevant time, a party, and
- the Ombudsman considers it necessary to investigate the health care provider.
Can the Ombudsman require a health care provider to participate in mediation?
Yes, the Ombudsman can invite or direct a health care provider subject to a complaint or undergoing investigation to participate in mediation (Act, ss 20T(1)(c), 20X and 20Y). However, a complaint (under Division 3 of the Act) or investigation (under Division 4 of the Act) must already be underfoot.
The Private Health Insurance Ombudsman Rules may prescribe matters to which the Ombudsman must have regard when deciding whether to direct parties to participation in mediation (Act, 20B). To date no Rules have been published.
Any direction requiring a health care provider to mediate must:
- be in writing
- name the subject of the complaint or investigation and or the officers of that subject
- be given to those named in it
- specify the time of the mediation, which must not be earlier than 14 days after the day the direction is given, and
- specify the place of the mediation (Act, s 20Y).
It is an offense for a person or party directed to mediate not to participate in the mediation when the other party is willing to attend. This offense carries 10 penalty units, or A$2,220 at the time of writing.
Compulsory mediation will only stop if the parties agree to settle, or the Ombudsman concludes the matter cannot be settled by mediation (Act, s 20ZA(2)). The Mediator must report to the Ombudsman about terms of settlement, including action to be taken (Act, s 20ZA(4)(c)). However, evidence of anything said during mediation is not admissible in court or proceedings (Act, s 20ZB).
Can the Ombudsman force a health care provider to deliver records?
Yes, in limited circumstances. Although the Ombudsman does not have general powers to inspect or audit records belonging to health care providers (Act s 20SA and 20SB), it does have broad information gathering powers. If the Ombudsman reasonably believes a person can give information or records relevant to a complaint under Division 3 or an investigation under Division 4 (including mediating as part of the investigation), the Ombudsman may, by notice in writing, require a person to give information or records specified in a notice (Act, s 20ZE). We recommend you seek legal advice before producing documents in answer to a notice.
Consequences of Ombudsman's findings
The Ombudsman has power to report to the Health Minister on certain matters and make recommendations that may impact a private health care provider or a class of providers.
Authors
Chelsea Gordon