ACCC proposes to authorise capped fees of Canberra After Hours Locum Medical Service

The Australian Competition and Consumer Commission has issued a draft determination proposing to grant authorisation* to the Canberra After Hours Locum Medical Service to implement a capped fee structure.

Under the new fee structure, the fees CALMS doctors charge patients seeking after hours care will not exceed a certain level.

CALMS has entered a contract with ACT Health implementing the changes to the CALMS fee structure. CALMS and ACT Health, which strongly supports the CALMS application, see the capped fee structure as an integral part of reforms to after hours primary medical services in the ACT.

CALMS states that the capped fee structure will promote transparency and certainty regarding fees for patients seeking after hours primary medical care in the ACT.

"Certainty regarding CALMS fees will allow patients to make informed consumer decisions about after hours health care in the ACT", ACCC Chairman, Mr Graeme Samuel, said today.

The ACCC notes the potential for price agreements in medical rostering to raise serious competition concerns. However, the ACCC has publicly stated that medical rosters which have the purpose of facilitating patient access to medical services do not, in themselves, breach the Trade Practices Act 1974.

"The CALMS roster is specifically intended to ensure a service to the community", Mr Samuel said.

"While the ACCC considers that the capped fee structure has the potential to lead to anti-competitive pricing, with doctors gravitating towards charging the maximum fee, any scope for anti-competitive pricing is limited by doctors' discretion to charge lower fees or bulk bill where appropriate".

Competition concerns in this case are also mitigated by the narrow scope of the arrangement, the fact that the arrangement involves a price cap rather than a price floor, and the limited nature of competition amongst providers of after hours care with or without the arrangement.

"The ACCC is currently satisfied that public benefits likely to flow from the capped fee structure outweigh potential anti-competitive detriment. As a result, the ACCC is proposing to grant authorisation".

The ACCC now seeks further submissions in response to its draft determination.

Background

*The ACCC has the function, through the authorisation process, of adjudicating on certain anti-competitive practices that would otherwise breach the Trade Practices Act 1974. Authorisation provides immunity from court action, and is granted where the ACCC is satisfied that the practice delivers a net public benefit. Interim authorisation allows the parties to engage in the conduct prior to the ACCC considering the substantive merits of the application. The ACCC's decision in relation to interim authorisation should not be taken to be indicative of whether or not final authorisation will be granted by the ACCC.