The Private Hospitals & Clinics Association (PHCA) violated the Fair Trade Law by developing a consulting fee schedule for medical record inquiring by insurance Institutions
Chinese Taipei
Case:
The Private Hospitals & Clinics Association (PHCA) violated the Fair Trade Law by developing a consulting fee schedule for medical record inquiring by insurance Institutions
Key words:
obviously unfair, association, fee schedule, insurance, medical fees
Reference:
Fair Trade Commission Decision of December 31, 1997 (the 322nd Commission Meeting); Decision (87) Kung Ch'u Tzu No. 035; Letter (87) Kung I Tzu No. 8502030-005
Industry:
Other Medical Health Service Industry (8239)
Relevant Laws:
Article 24 of the Fair Trade Law
Summary:
There were complaints reporting that, in its second year of operation and during its 11th joint meeting of directors and supervisors held on 16 January 1996, the PHCA developed a consulting fee schedule for insurance institutions‘ inquiry with PHCA's member clinics and hospitals regarding patients' medical records, i.e., a copy of an outpatient service record would charge NT$800 and a copy of a hospitalization record NT$1,600. Following the joint meeting, PHCA sent its members a written notice for reference. The complaints requested this Commission to investigate whether such acts were in violation of the Fair Trade Law.
The investigation showed that insurance institutions usually need to consult the insured's medical records when they examine insured's qualifications and fix the reasonable amount for claims. Article 51 of the Medical Care Law requires that "hospitals and clinics while treating a patient may consult the hospitals and clinics where the patient previously received treatment for the summary of their medical history and a variety of check-up reports if needs arise and the patients' consent, or the consent of their spouses or family members, is given." Therefore, insurance institutions, with the patient's consent or the consent of his or her spouse or family members, may inquire with hospitals for the patient's medical records. Such inquiries involve the so-called "consulting fees" as used in this case, which fees should have been decided by medical institutions on their own. On the other hand, according to an investigation conducted from 1993 to 1995, 12 medical centers, 42 regional hospitals, 66 local college hospitals, and 476 local hospitals have successfully passed a hospital evaluation. As for the members of PHCA, there were 5 medical centers, accounting for 42% of the domestic medical centers, and 21 regional hospitals, accounting for 50% of the domestic regional hospitals. By its high percentage in these two kinds of medical institutions, the PHCA members surely have a considerable influence on medical institutions that are relatively large with better and adequate medical equipment.
Based on the inflation rate, manpower and time involved since 1987, PHCA proposed to set consulting fees for medical record inquiries with its members by insurance institutions. A joint meeting of directors and supervisors passed a resolution by which a copy of an outpatient service record would charge NT$800 and that of a hospitalization record NT$1,600. A written notice containing such a resolution was then sent to each of its members for reference. However, according to this Commission’s investigation, though PHCA did correct the aforesaid resolution in a correction letter sent to its members, it again provided reference materials based on which its members might adjust their consulting fee schedule. This indicated that the PHCA was taking advantage of its special leading position in taking the initiative to guide its members to raise drastically the consulting fees for insurance institutions that made medical record inquiries of its members. As such consulting fees paid by insurance institutions constituted one of the sources of income for medical institutions, higher consulting fees would subsidize medical fees the hospitals and clinics collected from patients. That is, there was a complementary relationship between the consulting fees and the medical fees. Therefore, PHCA's act of developing a consulting fee schedule for insurance institutions raised a concern that competition in the medical market might be indirectly impaired.
Article 24 of the Fair Trade Law states that "except otherwise provided for in this Law, no enterprise shall engage in any deceptive or obviously unfair acts that could adversely affect the order of trade." Therefore, PHCA, without putting the interested party on an equal footing, unilaterally decided the consulting fee schedule for insurance institutions in its joint meeting of directors and supervisors, and wrote to its members, encouraging them to raise such consulting fees. The insurance institutions, during the process of inquiring about patients' medical records, were therefore at a serious disadvantage. PHCA's act was unfair and would adversely affect the order of trade in the market. Accordingly, the acts were in violation of Article 24 of the Fair Trade Law.
Summarized by Lai, Mei-hua
Supervised by Lin, Yu-ch'ing
Appendix:
Private Hospitals & Clinics Association's Uniform Invoice Number 76941208