ACCC ruling on fee setting - what you need to know

7 Mar 2013

As part of the AMA’s advocacy on behalf of GPs, the AMA applied to the Australian Competition and Consumer Commission (ACCC) for an authorisation to allow GPs working in the same practice to agree on the fees charged to patients attending that practice.

On 21 February 2013, the ACCC agreed to the application and this means that GPs throughout Australia who practise as separate entities in a single practice can legally engage in: 

  • intra-practice price setting; 
  • collective bargaining, as a single practice with VMO Service Purchasers, in relation to the provision of VMO Services to public hospitals; and 
  • collective bargaining, as a single practice, with Medicare Locals, in relation to the provision of Medicare Local services. 

The authorisation lasts for five years, effective from 15 March 2013. It protects GPs from action under the Competition and Consumer Act in relation to the above practices.

More details and answers to specific questions can be found below.

  1. What is the background to the application and authorisation?
  2. What types of practice does the authorisation apply to?
  3. What if I am an employee, rather than self employed?
  4. Which groups does it apply to?
  5. How long will the authorisation last?
  6. What does it mean in practice?
  7. Can separate practices in the same geographic location set common fees?
  8. What does it mean to my patients?
  9. What if I don't want to take part in common fee setting or negotiations?
  10. Does this mean I can get together with the other GPs in my practice and collectively bargain with a hospital or Medicare Local?
  11. Does it also allow collective boycotting?
  12. What if I have a query about the authorisation?

 

What is the background to the application and authorisation?

In response to feedback from the AMA’s GP members about potential competition law concerns, on 11 September 2012, the AMA applied for authorisation for GPs to engage in: 

(a) intra-practice price setting;

(b) collective bargaining by GPs working in a single practices in relation to engagement of Visiting Medical Officers to public hospitals; and

(c) collective bargaining by GPs working in single practices in relation to the provision of services to Medicare Locals.

The AMA was able to demonstrate to the ACCC that the application met the public benefit test by delivering administrative efficiencies, improved continuity of patient care and by supporting the recruitment and retention of GPs – particularly in rural and remote areas. 

The application in its final form received overwhelming support from the submissions received by the ACCC in response to the AMA’s application.

Back to questions

 

What types of practices does the authorisation apply to?

The authorisation applies to practices where one or more GPs operate together and share certain things in common, but where each GP is a separate legal entity. These may be:

  • a partnership of two or more GPs where not all partners are natural persons (that is, where at least one is a body corporate or other separate legal entity);
  • an associateship of two or more GPs;
  • any other business structure which involves two or more separate legal persons, whether natural persons, partnerships and/or bodies corporate; or 
  • any of the above which, from time to time, employs GPs on a locum basis.

In addition, these practices need to share three or more of the following: 

  • patient records;
  • common facilities;
  • a common trading name; and/or
  • common policies and procedures.

The authorisation extends to other GPs who, in the future, practise in a single general practice (including a branch practice) that meets the criteria set out above. 

Back to questions

 

What if I am an employee, rather than self employed?

If you are a GP employed by a practice receiving a salary, you don’t have to be concerned about the authorisation. If you are in doubt about your status, contact your State AMA. 

Back to questions

 

Which groups does it apply to?

The authorisation applies to all GPs throughout Australia who work as separate entities in a single practice. They do not have to be AMA members. 

It does not apply to other specialist groups. 

Back to questions

 

How long will the authorisation last?

It is granted for a period of 5 years from 15 March 2013. That is, until 15 March 2018. After that date, the authorisation cannot be presumed to be in force. However, the AMA will apply for a renewal to ensure that GPs are not exposed to action under competition laws. 

Back to questions

 

What does it mean in practice?

It means that GPs working in the same practice can now reach agreement on a common fee structure and charge patients the same fee without fear of action from the Australian Competition and Consumer Commission (ACCC). Normally this may be considered ‘anti competitive behaviour’ under the Competition and Consumer Act. However, due to the public benefit and the merits of the AMA application, the ACCC has seen fit to provide a specific authorisation to allow GPs in the same practice to have a common fee structure. 

It also means those same GPs operating in the same practice can negotiate collectively with hospitals for their VMO contracts, and with Medicare Locals for common terms on the provision of services to Medicare Locals.

Back to questions

 

Can separate practices in the same geographic location set common fees?

No. Separate practices are not able to use the authorisation. However, separate branches of a particular practice are considered part of the practice and may take advantage of it. 

Back to questions

 

What does it mean to my patients?

It means you and the other GPs in your practice can set a common fee structure, making things clearer and easier for patients. 

Back to questions

 

What if I don’t want to take part in common fee setting or negotiations?

There is absolutely no compulsion to do so. The authorisation is entirely voluntary. You are free to take advantage of it or not, depending on what works best for you and your practice.

 

Back to questions

 

Does this mean I can get together with the other GPs in my practice and collectively bargain with a hospital or Medicare Local?

Yes, collective bargaining is allowed by the authorisation where GPs from the same practice come together to negotiate with a hospital or Medicare Local and negotiate together over terms, conditions and prices. A group of doctors may sometimes appoint a representative for that purpose to save time and costs.

Back to questions

 

Does it also allow collective boycotting?

No. The authorisation allows for collective bargaining or negotiating, not collective boycott activity. A collective boycott would occur if a group of doctors which operate as separate entities, got together and agreed not to supply their services to a hospital or Medicare Local unless the hospital or Medicare Local accepts the terms and conditions offered by them. The ACCC authorisation does not allow for this conduct.

Back to questions

 

What if I have a query about the authorisation?

The AMA is happy to provide further information about the authorisation. Contact your State or Territory AMA:

NSW: http://amansw.com.au/
VIC: http://amavic.com.au/
QLD: http://www.amaq.com.au/
SA: http://www.amasa.org.au/
WA: http://www.amawa.com.au/
TAS: http://www.amatas.com.au/
NT: http://www.amant.com.au/
ACT: http://ama-act.com.au/

A copy of the AMA Press Release following the ACCC decision on GP fees can be found here.

A copy of the Determination (A91334) made by the ACCC on the Application for authorisation lodged by Australian Medical Association Limited in respect of intra-practice prices setting and collective bargaining is available for download below.

Back to questions