Surgery items under review after insurer rort claims

But insurers now say their bills for medical devices only fell by $13 million last year, not the $250 million promised, because of an 19 per cent increase in the volume of “general and miscellaneous” items used in hospitals,

Insurer lobby group Private Healthcare Australia said rebates for these items – including skin glues, sponges and temporary tubes – increased 19.2 per cent last financial year, even as the number of surgeries carried out rose only 0.3 per cent.

Health minister Greg Hunt’s office said the review would consider medical devices costs and whether they were being inappropriately “bundled” together. Credit:AAP

The group alleged manufacturers redesigned some products to maximise revenue, by cutting the container size of skin glues for instance, or by increasing the number of items sold in bundles.

A spokesman for Mr Hunt said the review would “ensure the cost of these medical devices is appropriate and that firms are not inappropriately bundling items together”.

The review will deliver recommendations in the first half of next year and the government will “carefully consider the findings”, he said.

Draft terms of reference say the six-month review will examine usage and cost data of the items, and consider if they should be removed from the prostheses list and paid for through another mechanism.

Medical Technology Association of Australia chief executive Ian Burgess said the device makers welcomed the review into issues such as “bundling”, which he said was not happening.

“Let’s have a proper analysis and review process rather than insurers making baseless claim in the media,” Mr Burgess said.

The apparent rise in the “miscellaneous” prostheses category could partly be explained by movement of some items between categories, Mr Burgess said, while funds’ overall spending on devices was clearly falling.

Private Healthcare Australia chief executive Rachel David said her members were “very happy” the government was looking at the issue, which was affecting affordability in the sector.

“This is real money belonging to health fund members and the growth in this category is having a material impact on premiums with no concurrent improvement in patient outcomes,” Dr David said.

The focus on prostheses and medical devices costs comes as health insurers face what has been described as a “death spiral” – with their hospital costs rising and members downgrading or cancelling their memberships because of the resulting premiums hikes.

Health insurers last week submitted their proposed annual premium increases to Mr Hunt for approval, and had warned that a failure to deal with high prostheses costs would lead to higher member fees.


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