Third party mooted for fee talks

Consultants' fees: The Competition Authority has proposed that a third party or "messenger" could act as an intermediary between hospital consultants and the private health insurance industry in determining future fee schedules.

The proposal emerged from discussions between the Competition Authority and the Irish Hospital Consultants Association (IHCA) after its landmark ruling last month that the consultants' representative body had engaged in price fixing in negotiating fees with the VHI.

Following a lengthy investigation, the Competition Authority found that the aim of the consultants in negotiating fees with the VHI on its "total cover" deal was to eliminate or restrict competition, particularly price competition, between medical specialists.

Under the "total cover" deal, consultants receive a higher fee from the VHI in return for a commitment not to send balance or top-up bills to the patient.

The authority found that the conduct of the IHCA had harmed consumers who were forced to pay higher subscriptions or receive lower levels of benefits because of the absence of competition.

On foot of the Competition Authority ruling, the IHCA played no role in determining new fee offers made to consultants by the VHI last week on an extension of the total cover deal for a further two years.

Under the VHI offer, consultants would this year receive an average increase of 4.25 per cent for the majority of procedures with a further 4.25 per cent rise next year.

Consultants individually will either have to accept or reject the VHI fee offer without advice or endorsement from their representative bodies.

Currently, well over 90 per cent of consultants accept the VHI "total cover" fees in full and total settlement of patients' accounts. Any major diminution of that figure could lead to the return of widespread balance billing which has largely been eliminated over the past decade.

The Irish Times understands that in discussions with the IHCA, the Competition Authority has floated the idea that a third party or a "messenger" could act as an intermediary between consultants and the insurance companies in future fee negotiations.

Informed sources said the Competition Authority pointed out that in other jurisdictions such "messengers" acted as a channel to pass on information on proposals which would or would not be acceptable.

Under such a scenario there would still be no face-to-face negotiations on fees between the consultant representative bodies and the insurance companies.

Sources said that it was also open to the consultant bodies to come up with other proposals to address the finding of price fixing in the negotiation of fee schedules with the insurance industry.

The Competition Authority said it would initiate legal action against the IHCA unless it received an undertaking that such collective negotiations with insurers would cease.