Advisory AS18/10: Informed financial consent

Advisory details

Purpose

To describe assessment requirements for informed financial consent in health service organisations.

Issue

Informed financial consent (IFC) is the provision of cost information to patients, including notification of likely out-of-pocket expenses (gaps), by all relevant service providers, preferably in writing, prior to admission to hospital or treatment.

The Commission notes informed consent cannot be sought or obtained in certain circumstances, including for some patients admitted from an emergency department. 

With the introduction of the National Safety and Quality Health Service (NSQHS) Standards (second edition) from January 2019, compliance with informed financial consent requirements will be confirmed during accreditation assessments.

Action 2.04 of the NSQHS Standards requires:

The health service organisation ensures that its informed consent processes comply with legislation and best practice

Private hospitals

In private hospitals, the Private Health Insurance (Health Insurance Business) Rules 2018 (the Rules) require a hospital to make provisions for informed financial consent. This occurs when a patient or their nominee is informed in writing of what hospital charges, insurer benefits and out of pocket costs (where applicable) are expected regarding the hospital treatment they are expected to receive. A patient or nominee must be informed:

1. For scheduled admissions – at the earliest opportunity before admission for hospital treatment; or
2. For all other admissions – as soon after the admission as the circumstances reasonably permit.

In October 2017, the Australian Government Minister for Health announced a series of reforms to private health insurance administrative arrangements. These changes include simplified administrative arrangements for demonstrating compliance with informed financial consent requirements by private health service organisations as set out in the Rules.

Public hospitals

The Australian Government, states and territories have signed the National Health Reform Agreement to improve health outcomes for all Australians.  This Agreement reaffirms the commitment by states and territories to ensure that eligible persons who have elected to be treated as private patients have done so on the basis of informed financial consent. 

Public hospitals are required to provide a clear and unambiguous explanation of the consequences of private patient election. This explanation should include advice that private patients:

• Will be charged at the prevailing hospital rates for hospital accommodation for medical and diagnostic services, prostheses and any other relevant services 
• May not be fully covered by their private health insurance for the fees charged for their treatment and that they should seek advice from their doctor(s), the hospital and their health fund regarding likely medical, accommodation and other costs and the extent to which these costs are covered. 

NOTE: All health service organisations that provide patients with written confirmation that the health service organisation charges will not exceed the insured rebate do not need to provide detail on the hospital fee, health insurer benefits or estimates of co-payments. When this statement is signed by the patient or their nominee it meets the requirements for informed financial consent.

Requirements

To comply with informed financial consent requirements health service organisations treating patients accessing private health insurance funding must provide patients with information in writing, including:

1. Name of the proposed procedure 
2. Item number for the proposed procedure, if known
3. The hospital fee for this admission, as a dollar amount if it exceeds the patient’s insured rebate
4. The health insurer benefit, as a dollar amount. 
5. Where applicable, estimates of co-payments including any excess as a dollar amount
6. A statement noting where costs are estimates, and may vary. Reasons for the variation such as length of stay, type of procedure actually performed rather than scheduled, or other relevant reasons for variation in costs should be included. 
7. Where applicable a statement listing other relevant service providers that may bill a patient separately from the health service organisation. This may include, but is not limited to:
   • Pharmacy
   • Pathology
   • Surgeon
   • Anaesthetist 
   • Perioperative / surgical assistant 
   • Neonatologist
   • Radiology 
   • Physiotherapy
   • Other allied health providers
     Note: This list is provided for the benefit of health service organisations preparing documentation on informed financial consent and is not intended as a check list for assessors. 
8. A statement advising patients to confirm with their health insurer prior to admission or as soon as practical after admission, the following: 
   1. Rates of reimbursement for each of the expected charges for the specific insurance policy they hold 
   2. If the planned admission or treatment is within a waiting or exclusion period for the policy
   3. If the admission or treatment is covered by the health fund’s no gap or gap cover scheme.
9. A space for the patient (or nominated substitute decision maker) to sign the form confirming that they have been informed of, and understand the charges.

At assessment, assessors are to:

1. Confirm informed financial consent forms comply with the requirements set out in this Advisory
2. Review evidence that privately insured patients receive informed financial consent prior to elective admission or as soon as practical for all other admissions
3. Award a not met rating if informed financial consent forms or process do not comply with this Advisory.

A health service organisation’s compliance with the requirement of this Advisory for informed financial consent will contribute to overall compliance with Action 2.04.