ACCC gives certainty to doctors within general practices on fee-setting

19 December 2002

The Australian Competition and Consumer Commission has moved to give certainty to general practitioners who wish to agree on patient fees without risking action under the Trade Practices Act, ACCC Chairman, Professor Allan Fels, said today.

"The ACCC has never pursued GPs at the same practice for agreeing on fees. However, it acknowledges that price-fixing issues might arise if GPs in general practices established using some types of business structure did agree on patient fees.

"The ACCC’s decision to grant authorisation* follows an application by the Royal Australian College of General Practitioners (RACGP). The decision confirms that GPs who provide medical services on behalf of a corporation can already agree on patient fees.

"The decision also confirms that GPs in all partnerships are now able to agree on fees. Most can already. Broadly, agreements between partners, including on fees, are exempt from the Act. However, to ensure the exemption is not abused, the Act provides that partnerships with corporate members are excluded from the exemption.

"The ACCC's decision will now allow GPs in partnerships with corporate members to agree on patient fees without risking a breach of the Act, as long as these partnerships have a common trading name, bank account, fee collection and medical records systems and an agreed set of policies and procedures. In granting authorisation, the ACCC noted that partnerships are a traditional form of business structure that should remain available to GPs.

"The ACCC has granted authorisation to GPs in associateships meeting certain criteria, many of which were specified by the RACGP in its application.

"Associateships are groups of GPs who wish to remain independent businesses while co-locating to obtain certain advantages. Some may simply share rent and administrative costs, while others may be more closely integrated.

"Conditions specified by the RACGP include that the GPs have a common bank account and trading name, a common set of medical records and, in most cases, common practice policies and procedures. In addition, the ACCC has required that associateships be accredited by the RACGP or otherwise meet certain conditions aimed at ensuring that the associateship is functioning as one medical entity.

"The ACCC concluded that allowing associateships that function as one medical entity to agree on fees would help facilitate a team approach to patient care, thereby improving quality. The decision would not allow fee agreements between doctors in different general practices.

"The ACCC has been dealing with issues concerning GPs since 1974 where they are incorporated, or when they practised in the Australian Capital Territory or the Northern Territory, and since the mid-1990s for all GPs. During this time, it has not acted on any allegations of price-fixing by GPs within the same practice or clinic. Nevertheless some concerns have been aired, which this authorisation addresses.

"The authorisation will apply to GPs in rural and remote as well as metropolitan areas across Australia. The ability under the Act to lodge a national application for authorisation has removed the need for each individual general practice to apply to the ACCC separately for authorisation to agree on fees.

"The grant of authorisation to any form of anti-competitive conduct does not compel persons covered by the authorisation to engage in the conduct. For example, as regards this authorisation, individual GPs within authorised associateships are still free to choose whether or not to agree on fees with other GPs in the associateship. Further, any action by GPs in an authorised associateship to coerce another GP within the practice to, for example, cease bulk-billing may breach the primary boycott provisions of the Act.

*The ACCC has the function, through the authorisation process, of adjudicating on certain anti-competitive practices that would otherwise breach the Trade Practices Act. Authorisation provides immunity from court action, and is granted where the ACCC is satisfied that the practice delivers offsetting public benefits. Applications for authorisation are considered on a case by case basis and involve broad public consultation with interested parties. The onus is on the applicant to demonstrate that there is a public benefit arising from the conduct and that the public benefit outweighs any public detriment.

Release number: 
MR 332/02
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