Doctors must set their fees in a manner consistent with their practice structure, which will determine how to set fees so they don’t breach the Act.
Doctors who exchange fee information to assist in obtaining informed financial consent from patients will not breach the Act, so long as they do not agree on what fees will be charged to patients.
A single company, sole natural person, legal partnership with no corporate partners, or trust is a single legal entity. All doctors practising within a single legal entity in any of these forms—either as directors, employees or partners—are considered part of the same entity. They are therefore not in competition with each other for the purposes of the Act and are able to agree on the fees to be charged by that entity, without breaching the Act.
Fee setting in this situation is not illegal price fixing, but is instead an internal management decision about prices, made by the individual entity.
Doctors practising through separate legal entities, or within a legal partnership with at least one corporate partner, are considered competitors for the purposes of the Act.
Fee setting in this situation is illegal price fixing, but in some circumstances may be authorised by the ACCC for a specific period of time. For example, the ACCC has authorised GPs and dentists to set practice prices.
In some circumstances the ACCC has denied authorisation to such arrangements, for example in the case of proposed fee setting by ophthalmologists. As set out in the decision, the ACCC considers that common fee setting by professionals in shared practices is likely to result in significant detriment, except where there are a number of competitors in each area that provide a real competitive constraint to the shared practice.
The ACCC considers the primary potential benefits from common fee setting by professionals within shared practices will arise from the cost savings, efficiencies and greater teamwork and collaboration from operating as a shared practice. As a result, common fee setting will typically only deliver significant benefits where it results in a greater number of shared practices than would otherwise be the case.
For current authorisations please see the ACCC’s authorisations register.
Doctors practising through separate entities who collectively agree not to bulk bill all or certain patients are likely to be in breach of the exclusionary agreement and the price fixing provisions of the Act.
This kind of agreement between separate entities has the purpose of preventing, restricting or limiting the supply of medical services to patients in circumstances in which the fees for the services could be processed by bulk billing. That is, if there were no such agreement, patients might have been bulk billed.
An agreement between doctors, practising through separate entities, to bulk bill all patients may be considered price fixing. Even though it is an agreement to charge the lowest likely price, it is still an agreement between competitors on the fee to be charged and is therefore technically a breach of the Act.
The ACCC, however, has discretion over when it will take matters to court. In making such decisions it will consider a range of relevant factors, including the level of harm to consumers from the conduct, and the overall public interest.
The ACCC considers that an agreement between doctors to bulk bill all patients would be unlikely to result in any harm to patients, as the bulk billed rate is the lowest fee that a doctor is likely to charge for their services and would therefore not take action against agreements to bulk bill.
However, it should be noted that other people still have a right of private action under the Act. To ensure that there is no risk of breaching the price fixing law, even regarding collective agreements to bulk bill, each separate entity should independently decide on what fees to charge its patients.
Generally speaking, the following would not typically be considered by the ACCC to be likely to breach the Act:
- merely being aware of the fees that other doctors charge—it is normal commercial behaviour to know what your competitors charge
- doctors practising through separate entities informing other doctors of the fees those entities have independently decided to charge, for the purpose of obtaining informed financial consent from patients
- doctors practising through separate entities discussing economic factors, information or formulae that have been or will be used in independently determining their fees (based on their own individual costs and expected levels of profit). This type of discussion may sometimes occur at professional association meetings or conferences, in the context of discussions about the factors affecting an industry or profession
- the fact that two or more doctors practising through separate entities happen to charge the same fee.
In contrast, the ACCC considers that the following would risk breaching the Act if a decision is made between doctors practising through separate entities to:
- charge the same fee
- charge different fees
- increase or decrease fees
- agree fees, regardless of whether the agreement is actually put into effect by some or all of the doctors.