Australian Competition Tribunal

Applications for review of Honeysuckle Health Buying Group authorisation determination (No 2) [2022] ACompT 4

Review from:

Applications by National Association of Practising Psychiatrists and Rehabilitation Medicine Society of Australia and New Zealand Ltd for review of Authorisation Determination AA1000542 made on 21 September 2021 in favour of Honeysuckle Health Pty Ltd and nib health funds limited in respect of the Honeysuckle Health Buying Group

File numbers:

ACT 4 of 2021

ACT 5 of 2021

Determination of:

O'BRYAN J (Deputy President)

DR D ABRAHAM (Member)

PROF K DAVIS (Member)

Date of Determination:

29 July 2022

Date of reasons:

16 August 2022

Catchwords:

COMPETITIONapplications for review of authorisation determination made by the Australian Competition and Consumer Commission under s 101 of the Competition and Consumer Act 2010 (Cth) – application for leave to withdraw the applications for review – where the applicants for review and the intervener had entered into a Deed of Settlement and Release with the applicants for authorisation – where Deed contains terms that may lessen competition and reduce the public benefits from the authorised conduct – where operation of Deed conditional on the Tribunal granting leave to withdraw the applications for review – ACCC appointed as contradictor to the application for leave – applicable principlessubsequent amendments to the Deed – application for leave to withdraw granted

Legislation:

Competition and Consumer Act 2010 (Cth) ss 88(1), 91(1A), 91B, 101, 102(6), 103(1)(a)

Cases cited:

Application by Controlabill Pty Ltd [2021] ACompT 6

Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24

Re Country Television Services Limited (1984) 73 FLR 68

Re Football Queensland Limited [2012] ACompT 15

Re Nursing Agencies Association of Australia [2003] ACompT 2; 175 FLR 423

Number of paragraphs:

118

Date of hearing:

27 July 2022

Counsel for the Applicants:

P Thiagarajan with J Gray (Pro Bono)

Solicitor for the Applicants:

DLA Piper

Counsel for the Authorisation Applicants:

M Borsky QC with A Lord

Solicitor for the Authorisation Applicants:

MinterEllison

Counsel for the Australian Medical Association Ltd (Intervener):

D Preston with N Kotzman

Counsel for the Australian Competition and Consumer Commission:

R C A Higgins SC with A Barraclough

Solicitor for the Australian Competition and Consumer Commission:

Norton Rose Fulbright

IN THE AUSTRALIAN COMPETITION TRIBUNAL

ACT 4 of 2021

ACT 5 of 2021

RE:

Applications for review of Authorisation Determination AA1000542 made on 21 September 2021 in favour of Honeysuckle Health Pty Ltd and nib health funds limited in respect of the Honeysuckle Health Buying Group

ApplicantS:

National Association of Practising Psychiatrists and Rehabilitation Medicine Society of Australia and New Zealand Ltd

TRIBUNAL:

O’BRYAN J (DEPUTY PRESIDENT)

DR D ABRAHAM (Member)

PROF K DAVIS (Member)

DATE OF DETERMINATION:

29 JULY 2022

THE TRIBUNAL DETERMINES AND DIRECTS THAT:

1.    The applicants in Tribunal proceedings ACT 4 and 5 of 2021 be given leave to withdraw their applications for review to the Tribunal.

REASONS FOR DETERMINATION

THE TRIBUNAL:

Introduction

1    On 8 October 2021, each of the National Association of Practising Psychiatrists (NAPP) and Rehabilitation Medicine Society of Australia and New Zealand Ltd (RMSANZ) (collectively, the Review Applicants) filed an application pursuant to s 101 of the Competition and Consumer Act 2010 (Cth) (Act) for a review of authorisation determination number AA1000542 (Authorisation) granted by the Australian Competition and Consumer Commission (ACCC) on 21 September 2021 under s 88(1) of the Act in favour of Honeysuckle Health Pty Ltd (Honeysuckle Health) and nib health funds limited (nib) (collectively, the Authorisation Applicants) in respect of the Honeysuckle Health Buying Group (HH Buying Group).

2    By its determination, the ACCC authorised the Authorisation Applicants to form and operate a buying group to collectively negotiate and manage contracts with healthcare providers (including hospitals and medical specialists) on behalf of private health insurers (PHIs), other medical insurance providers and other payers of healthcare services for a period of five years until 13 October 2026. In this determination, such entities that elect to become participants in the HH Buying Group are referred to as “participants”. Although participants in the HH Buying Group may include PHIs and other payers of healthcare services, the focus of the ACCC’s determination and the issues on this review principally concern the supply of private health insurance and the commercial arrangements between PHIs on the one hand and hospital and medical specialists on the other. The Authorisation was granted with a condition that the Authorisation Applicants must not supply services to the following PHIs which were described as “Major PHIs” in the determination: Medibank, Bupa, HCF and HBF (in Western Australia).

3    On 25 May 2022, the Tribunal granted Australian Medical Association Ltd (AMA) leave to intervene in the proceeding, but refused leave to intervene to the Royal Australian and New Zealand College of Psychiatrists (RANZCP) and the Australian Pain Society (APS): see Applications for review of Honeysuckle Health Buying Group authorisation determination [2022] ACompT 3.

4    The review was set down for hearing by the Tribunal on Monday, 1 August 2022 for five days.

5    On 18 July 2022, the Review Applicants jointly filed an application with the Tribunal seeking leave to withdraw their respective applications for review. The application was supported by the Authorisation Applicants and the AMA and was not opposed by the ACCC. As part of their application, the Review Applicants disclosed to the Tribunal that a Deed of Settlement and Release dated 18 July 2022 (Original Deed) had been entered into between the Authorisation Applicants, the Review Applicants and the AMA, and provided a copy of the Deed to the Tribunal. That was an appropriate course for the Review Applicants to have followed. As discussed in these reasons, the terms of the Original Deed have a bearing on the exercise of the Tribunal’s discretion whether to grant leave to withdraw. The Review Applicants also provided to the Tribunal a document titled “Honeysuckle Health Undertaking” (Undertaking) which contained undertakings by Honeysuckle Health (although it was not clear to whom the undertakings were purportedly given).

6    On 20 July 2022, the Review Applicants filed submissions in support of their application for leave to withdraw.

7    Having considered the terms of the Original Deed and the Undertaking, and recognising that all of the parties to the proceeding supported the grant of leave to withdraw, the Tribunal determined that it would be assisted by hearing from a contradictor. On 22 July 2022, the Tribunal made a direction pursuant to s 102(6) of the Act requiring the ACCC to furnish assistance to the Tribunal in the following terms:

In respect of the application by the Applicants for leave to withdraw their application for review, to act in the capacity of a contradictor to represent the interests of Australians as acquirers of health insurance services, including by making submissions, adducing evidence or proposing to the Tribunal that information or documents be sought, and thereby to assist the Tribunal perform its function in relation to the application for leave to withdraw having regard to the object of the Act as specified in s 2 of the Act.

8    In accordance with that direction, on 26 July 2022 the ACCC filed submissions that identified considerations that weighed against the grant of leave. The Tribunal expresses its appreciation for the assistance provided by the ACCC in its role as contradictor.

9    The application for leave to withdraw was heard on 27 July 2022. During the hearing, the Tribunal identified certain provisions of the Original Deed that may have anti-competitive effects, and also questioned the confidentiality obligations contained in the Deed. Following the hearing, the parties informed the Tribunal that they proposed to amend the Original Deed to address issues raised during the hearing. On 28 July 2022, the parties executed a new Deed (which we will refer to as the Revised Deed) which was identical to the Original Deed save that it excised cll 4.2(a), 4.2(b) and 7 of the Original Deed (and renumbered dependent clauses accordingly).

10    On 29 July 2022, and on the basis of the Revised Deed (a copy of which is annexed to these reasons), the Tribunal granted the Review Applicants leave to withdraw their applications for review. These are the Tribunal’s reasons for that decision. The reasons largely address the Original Deed to explain the Tribunal’s concerns with respect to the Original Deed and the amendments that were subsequently made which resulted in the Tribunal granting leave to withdraw.

Background

Relevant features of the private health insurance market

11    As explained in more detail below, the Authorisation concerns the private health insurance market, and specifically the commercial arrangements between PHIs on the one hand and hospitals and medical specialists on the other. In this review, there is a particular focus on the commercial arrangements between PHIs who choose to become participants in the HH Buying Group and medical specialists. The following description of the private health insurance market is largely extracted from the affidavit of David Du Plessis filed in the proceeding on behalf of the Authorisation Applicants. The Tribunal understands the following matters to be uncontroversial.

12    In Australia, private healthcare operates alongside the public Medicare system. Medicare provides free hospitalisation in public hospitals as well as subsidised medical care. The Medicare system is intended to ensure that all eligible Australians are able to access hospital treatment as a public patient in a public hospital. However, public patients in public hospitals are not able to choose the hospital to which they are admitted or the medical practitioners who will treat them.

13    The Health Insurance Act 1973 (Cth) (HI Act) and the Medicare Benefits Schedule (MBS) together regulate the Medicare benefits payable in Australia for medical services. The MBS lists a range of medical services which are subsidised by Medicare, allocating a fee payable for each (referred to as the Schedule Fee). Broadly, the types of services on the MBS include consultation and procedural services (including surgical), as well as diagnostic services. The MBS does not cover services provided by the hospital (e.g. accommodation and theatre fees). Although the HI Act and the MBS influence the market for private medical services, they do not attempt to directly regulate the prices charged for privately provided hospital and medical services. Consequently, while the MBS sets the rate at which the benefit for each service is to be calculated, the Schedule Fee for a service bears no direct relationship to the price for that service charged by medical practitioners and consumers can therefore still be exposed to some of the costs of medical services. Generally, consumers can claim from Medicare:

(a)    100 per cent of the Schedule Fee for services provided by a general practitioner;

(b)    85 per cent of the Schedule Fee for other out of hospital services provided by a medical practitioner; and

(c)    75 per cent of the Schedule Fee for in-hospital services provided by a medical practitioner to patients admitted to hospital as private patients.

14    The supply of private health insurance in Australia is regulated by, amongst other statutes, the Private Health Insurance Act 2007 (Cth) (PHI Act) and rules made under that Act and the Private Health Insurance (Prudential Supervision) Act 2015 (Cth). Private health insurance provides two main types of insurance cover:

(a)    The first is cover for hospital treatment, which provides cover for the cost of fees charged by a hospital for medical services and hospital services (such as accommodation and theatre fees). Consumers who have private hospital cover can elect to undergo hospital treatment in either a public or private hospital as a private patient.

(b)    The second is cover for general treatment (or extras cover), which provides cover for a range of ancillary services not covered by Medicare including dental, optical and allied health.

15    Pursuant to s 69-1 of the PHI Act, PHIs are not permitted to cover consumers for out of hospital medical services listed on the MBS. In-hospital services are all services that are provided by a medical practitioner during an episode of hospital treatment when the patient is admitted as a private patient. Pursuant to s 72-1 of the PHI Act, PHIs must pay 25 per cent of the Schedule Fee for in-hospital services. This means that where a person has private health insurance, Medicare and the persons PHI together pay 100 per cent of the Schedule Fee.

16    However, as noted earlier, medical specialists are not limited to charging the Schedule Fee. The Schedule Fee is a government subsidy and often lower than the prevailing market rate. The amount ultimately received by a medical specialist for their services depends on the amount, if any, the medical specialist charges above the Schedule Fee and the arrangement, if any, between the medical specialist and a patients PHI. In out of hospital settings, medical specialists may accept 85 per cent of the Schedule Fee as full payment from Medicare without requesting any further payment by patients or PHIs. This is referred to as bulk billing. Alternatively and more commonly, medical specialists may set a higher fee than the Schedule Fee. The difference between the Schedule Fee and the actual fee charged by the medical specialist is known as a gap, medical gap or gap fee and must be paid by the patient or, depending on the patients private health insurance coverage, their PHI. Medical specialists also enter arrangements with PHls that limit the amount of medical gap or gap fee they charge.

17    Where a patient has private health insurance, they assign their right to the Medicare component of the Schedule Fee to the PHI. The PHI collects the Medicare component of the Schedule Fee on behalf of the patient. The PHI then pays to the medical specialist as one lump sum:

(a)    the Medicare component of the Schedule Fee;

(b)    the 25 per cent of the Schedule Fee required to be paid by the PHI; and

(c)    any additional component, depending on the type of private health cover the patient has purchased as well as the terms of any agreement entered into by the PHI and relevant medical specialist.

18    Since 1995, and the introduction of the Health Legislation (Private Health Insurance Reform) Amendment Act 1995 (Cth) (the Reform Act), PHIs and medical specialists have been permitted to enter into medical purchaser provider agreements (MPPAs) where the PHI agrees to pay the medical specialist an amount in excess of 25 per cent of the Schedule Fee, in return for the specialist agreeing to charge the patient:

(a)    no extra fees (referred to as a no gap contract); or

(b)    a fixed extra fee (referred to as a known gap contract).

19    In subsequent years the take up of MPPAs was very low. This was because doctors were initially reluctant to enter into MPPAs with PHIs in circumstances where the negotiation and execution process was complex, administratively burdensome and time consuming. There was also a general reluctance to be seen to be contracting with a PHI. Due to these apprehensions, in 2000, the Health Legislation Amendment (Gap Cover Schemes) Act 2000 (Cth) was introduced and broadened the scope of MPPAs to enable PHIs to cover the gap without the need for a negotiated agreement between the PHI and medical specialist through gap cover schemes. This allowed PHIs to enter into arrangements with medical specialists through a simple registration process with standard terms and conditions instead of needing to have individual contracts with doctors. Under gap cover schemes, PHIs publish their terms and conditions and medical specialists may choose to register for the scheme and, additionally, opt in or out of the scheme on a case by case basis per patient or procedure. Like no gap or known gap MPPAs, gap cover schemes may provide for the PHI to cover, and the medical specialist to charge:

(a)    no extra fees (referred to as a no gap scheme); or

(b)    a fixed extra fee (referred to as a known gap scheme).

20    Unless the PHI and medical specialist have another arrangement, if a specialist does not register and opt into the gap scheme for a particular patient and procedure, the PHI will pay 25 per cent of the Schedule Fee to the medical specialist and the patient will be liable to pay any gap charged by the medical specialist. No gap schemes offer substantial utility to both consumers and medical specialists. In particular, gap schemes:

(a)    provide financial certainty to patients and help avoid the financial stress of being charged an unexpected gap fee for medical services; and

(b)    give greater certainty to medical specialists that the gap fee will be covered and paid quickly (by the relevant PHI rather than by the patient).

21    In addition to gap cover schemes, some PHIs offer MPPAs directly to medical specialists. Unlike under medical gap schemes, medical specialists generally do not opt out of MPPAs on a patient-by-patient basis as they are designed to eliminate gap payments for patients and provide funding certainty for these specialists.

22    The Reform Act also enabled PHIs and private hospitals to enter into hospital purchaser provider agreements (HPPAs). Under HPPAs:

(a)    PHIs generally agree to pay private hospitals higher daily rates than the minimum benefits prescribed by the Private Health Insurance (Benefit Requirements) Rules 2011 (Cth) (PHI Rules) for the cost of hospital accommodation and operating theatres; and

(b)    hospitals agree to limit or not charge the patient any out of pocket costs, aside from any co-payment specified in the HPPA.

23    If a private hospital does not have an HPPA with a PHI, the hospital is free to set its own charges and the PHI is liable to pay benefits at least equal to the minimum benefits also known as basic default benefits under the PHI Rules. The patient will be liable for hospital charges above those amounts.

24    As at December 2021, approximately 44.9% of the Australian population held hospital treatment cover and 54.7% held general treatment cover.

25    There are 640 declared private hospitals in Australia and approximately 220 hospital groups. A hospital group is where a corporate entity owns and operates a group of private hospitals. There are approximately 100,000 medical specialists in Australia. Medical specialists practice in different specialties, including surgery (within which there are a range of different sub-specialities such as orthopaedic surgery), psychiatry and rehabilitation medicine. As at 2016, of these medical specialists:

(a)    there were 1,236 orthopaedic surgeons employed in Australia, of whom 76.2% worked in the private sector;

(b)    there were 3,327 psychiatrists employed in Australia, of whom 49.7% worked in the private sector; and

(c)    there were 451 rehabilitation medicine specialists employed in Australia, of whom 37.7% worked in the private sector.

26    There are currently 35 PHIs in Australia, with the three largest insurers, Medibank, Bupa and HCF, accounting for approximately 62% of the private health insurance market nationally and nib accounting for approximately 10% nationally.

27    The PHIs compete in the supply of private health insurance benefits to consumers. The benefits able to be offered by each PHI depend upon the arrangements reached between PHIs and hospitals pursuant to HPPAs and between PHIs and medical specialists pursuant to MPPAs or medical gap schemes. Necessarily, a PHI requires the skills and resources to undertake contract negotiations and administration with respect to such arrangements. The Major PHIs undertake those tasks independently. The remaining (smaller) PHIs engage in collective bargaining through one of two existing buying groups: 27 PHIs are part of the Australian Health Services Alliance (AHSA) and 4 health insurers are part of the Australian Regional Health Group (ARHG). nib was previously a member of AHSA but withdrew in 2011 when it built its own internal contracting function.

The Authorisation

28    In the ACCC’s determination, the formal terms of the Authorisation are stated as follows:

Conduct authorised

5.6.     The ACCC grants authorisation AA1000542 to the following entities:

(a)     Honeysuckle Health Pty Ltd and nib Health Funds Ltd (collectively, the Applicants);

(b)     PHIs registered under the Private Health Insurance (Prudential Supervision) Act 2015 (Cth) except for the following specified entities, and any related body corporate (within the meaning of s4A of the Act), acquirer or successor entity of any of these specified entities:

    Medibank Private Limited,

    Bupa HI Pty Ltd,

    Hospitals Contribution Fund of Australia Limited, and

    HBF Health Limited, with respect to its operations within Western Australia (for clarity, HBF Health Limited is authorised with respect to its operations outside of Western Australia),

(collectively, Excluded Entities);

(c)     international medical and travel insurance companies;

(d)     government and semi-government payers of healthcare services such as workers’ compensation and transport accident scheme operators, and the Department of Veterans Affairs scheme (DVA); and

(e)     any other payer of health services or goods other than an Excluded Entity, as notified by HH to the ACCC,

(collectively, Authorised Entities).

5.7.     Authorisation AA1000542 applies in relation to the following conduct:

(a)     the formation and operation of the HH Buying Group by HH, including the BCPP, involving the provision of services to Authorised Entities; and

(b)     the acquisition of contracting services by Authorised Entities from HH.

5.8.     Authorisation is granted in relation to Division 1 of Part IV of the Act, and sections 45 and 47 of the Act.

5.9.     The ACCC grants authorisation with the following condition until 13 October 2026.

Condition of authorisation

5.10.     The ACCC may specify conditions in an authorisation. The legal protection provided by the authorisation does not apply if any of the conditions are not complied with.

5.11.     The ACCC grants this authorisation with the condition that the Applicants must not supply services to any Excluded Entity.

29    The conduct that is authorised is defined by para 5.7, extracted above, as the formation and operation of the HH Buying Group by HH, including the BCPP, involving the provision of services to Authorised Entities and the acquisition of contracting services by Authorised Entities from HH”.

30    The “BCPP” is the Broad Clinical Partners Program which is described in the determination as a program under which patients would receive a no gap experience for the whole episode of care for a surgical procedure(at [1.5]). More specifically, the BCPP is a scheme comprising MPPAs with all of the medical specialists involved in a single episode of hospital treatment so that there is no “gap” fee payable by the patient for the range of medical services provided during that episode of treatment. The BCPP currently offered by nib has a narrow scope in terms of the treatment it provides (hip and knee joint replacement surgery), its geographic location (only in NSW and Queensland) and the number of providers it engages (currently 35), but the Authorisation Applicants intend to broaden its scope to other medical procedures.

31    The definition of the authorised conduct in para 5.7 extracted above is not informative as to the nature and scope of the authorised conduct. To understand the nature and scope, it is necessary to have regard to other parts of the determination. The determination includes the following description of the proposed conduct to be authorised (in the determination, references to “Participants” are to the Authorised Entities who become participants in the HH Buying Group and references to “Providers” are to healthcare providers, being hospitals and medical practitioners):

The Proposed Conduct will involve four categories of contracting

1.24.     The four broad categories of contracting intended to be covered by the HH Buying Group are:

(a)     Hospital contracting – Hospital purchaser provider agreements (HPPAs), where hospitals agree not to charge out-of-pocket costs to customers of healthcare payers (Customers), and are used by PHIs to provide financial certainty to their customers

(b)     Medical specialist contracting – Medical purchaser provider agreements (MPPAs), used by health insurers to provide financial certainty to Customers in relation to potential out-of-pocket costs for specialist services (e.g. radiologists, pathologists, surgeons)

(c)     Medical gap schemes – where health insurers pay a set fee for each type of professional service provided to their Customers in hospital, and medical specialists agree not to charge Customers an out-of-pocket amount or agree to limit the amount the Customer is charged at a fixed amount (e.g. $500), and

(d)     General treatment networks – arrangements with Providers for services that are not provided in hospital (e.g. physiotherapists, dentists, optometrists) that are covered under the 'extras' component of private health insurance products.

Services provided by HH in each category of contracting

1.25.     For the four types of contracting, the Proposed Conduct will involve HH engaging in the activities outlined below.

For hospital and medical specialist contracting – data analytics and contract negotiations

1.26.     Initially, HH proposes to engage in collective negotiations with Providers that currently have HPPAs and MPPAs with nib in order to agree to new contracts with Participants based on the Provider's existing agreement with nib.

1.27.     HH intends to negotiate new HPPAs and MPPAs on an ongoing basis on behalf of nib and Participants as the nib-based contracts expire or enter into contracts with new Providers. HH intends to act as the lead agent in the negotiations after consultation with the Participants. This will involve:

    aggregation of Participant claims data for the Provider and undertaking data analytics to establish benchmarks relating to quality of service, price and application of services

    conducting collective commercial negotiations on behalf of Participants, and

    once HH receives instructions that a Participant wishes to enter into an HPPA or MPPA on the negotiated terms and conditions, coordinate the execution of the HPPA or MPPA between the Participant and the Provider (or execute the contract if HH has signing authority).

1.28.     The HH Buying Group will be voluntary and Participants will individually decide whether to enter into an HPPA or MPPA based on the terms and conditions negotiated by HH.

1.29.     If they choose to do so, Participants will execute an agreement with the Provider. HH will not be party to the agreement. HH will then undertake contract administration services for that agreement.

1.30.     If a Participant does not wish to enter into an agreement on the negotiated terms, the Applicants submit that Participants can negotiate directly with Providers and enter into agreements independently of the HH Buying Group on their own terms and conditions.

1.31.     The Proposed Conduct will not prevent Providers from offering services to other insurers, buying groups or healthcare payers that are not part of the HH Buying Group. Further, it will not restrict the terms and conditions upon which Providers are entitled to enter those agreements. Similarly, Providers will be able to contract with Participants individually or with a different set of Participants to those proposed by the HH Buying Group.

For the medical gap scheme and general treatment networks – management and administration of the schemes

1.32.    HH intends to engage with Providers registered in nib’s existing medical gap schemes and general treatment network to notify them of the extension of these schemes to Participants.

1.33.     On an ongoing basis, HH will manage the medical gap scheme and general treatment networks, review the schedules of rates and terms and conditions, and actively manage the registered Providers of the schemes and networks. This includes ensuring adherence to requirements around registration, qualification and other terms and conditions of the schemes and networks.

For all categories – contract administration, dispute resolution and ongoing data analytics

1.34.     HH intends to provide contract administration and management services, and dispute resolution services to Participants for the contracting services that they have engaged HH to undertake.

1.35.     HH will also provide Participants with data analytic services as part of contract negotiations but also on an ongoing basis to assess the performance of each Provider and benchmark their performance for each Participant against the aggregated data for the HH Buying Group. This would include an assessment of the following:

    provider quality

    provider compliance

    benefits paid to the Provider by Participants

    access to the Provider’s services, and

    efficiency and value of treatment provided by the Provider.

1.36.     Subject to confidentiality and privacy obligations, HH would also share information concerning one Participant with the HH Buying Group to the extent the information is related to agreements facilitated by HH or services provided by HH to the Participants. This could include information such as contract breaches by a Provider, or the discovery of fraudulent claims made by a Provider in relation to an agreement with one Participant, which would therefore be relevant to other Participants who contract with that Provider.

The Proposed Conduct involves ‘value-based’ contracting

1.37.     The Proposed Conduct involves a value-based contracting model, which HH describes as comparing health outcomes with the costs of providing services to determine the value of the service from the healthcare payer’s perspective.

1.38.     Under this model, HH would initially compare the value of services from a particular Provider against peers in the local region, State or Territory and nationally. Based on the outcomes and quality of care achieved by the Provider, the cost of the services would be adjusted (either through price or structure) to match the value being delivered by the Provider.

1.39.     Information sharing and data analytics between members of the HH Buying Group will provide the necessary information to assess the performance of Providers and benchmark their performance for each Participant against the aggregated data for the HH Buying Group.

1.40.     The Applicants state the BCPP, which provides a no gap experience to consumers for the suite of services involved in knee and hip replacements with certain medical specialists, is an example of value-based contracting.

32    Although not included as a condition of the Authorisation, the determination states (at [1.23]) that the Authorisation Applicants have not sought authorisation for the HH Buying Group to engage in the collective boycott of any services of a healthcare provider and that, as a consequence, the HH Buying Group is not permitted to boycott any healthcare providers that refuse to deal with the group. The determination does not describe or define the expression “boycott” and what conduct might be included within that expression.

Applications for Review

33    On 8 October 2021, the Review Applicants filed separate applications seeking review of the ACCC’s authorisation determination before this Tribunal. At the time of filing those applications, neither of the Review Applicants had the benefit of legal representation.

34    NAPP’s application for review sought to set aside the ACCC’s determination and for the Authorisation to be rejected, or in the alternative, that the determination be varied so as to exclude the HH Buying Group from “entering the mental/psychiatric health care service system”. RMSANZ’s application for review sought revocation of the ACCC’s determination, and the letter accompanying its application specifically sought that the Tribunal mandate that surgeons or physicians do not undertake decisions regarding rehabilitation programs unless to do so falls within their scope of practice.

35    The orders ultimately sought by the Review Applicants before the Tribunal were contained in their respective Statement of Facts, Issues and Contentions filed on 4 April 2022. The Review Applicants stated that they did not oppose the authorised conduct in so far as it related to hospitals. However, in so far as the authorised conduct related to commercial arrangements with medical specialists, both of the Review Applicants sought orders to the following effect:

(a)    that none of the Major PHIs may participate in any collective bargaining conduct with respect to the commercial arrangements to be entered into with individual medical specialists; and

(b)    in respect to the collective negotiation of the commercial terms on which individual specialists will be compensated for providing specialist services to holders of private health insurance policies, that no contract negotiated with, or offered to, individual specialists (whether as part of BCPP or otherwise) will:

(i)    include any target percentages for admissions or treatment outcomes;

(ii)    require patients to be discharged to home treatment where the clinician’s reasonable independent assessment is that in-patient treatment is in the patient’s best interests;

(iii)    require any specialist to have regard to any clinical or treatment guidelines formulated by any organisation other than a recognised specialist body representing that area of medical specialisation; or

(iv)    otherwise, in the clinician’s reasonable opinion, have the likely effect of interfering with the clinician’s reasonable independent assessment of the ideal treatment of each patient.

36    NAPP sought, as an alternative to (b) above, an order in similar terms but limited to contractual arrangements with practising psychiatrists. RMSANZ sought, as an additional condition as part of (b) above, that no contract negotiated with, or offered to, individual specialists (whether as part of BCPP or otherwise) will permit any assessment of the appropriateness of rehabilitation care in the home to be undertaken by any specialist other than a rehabilitation medicine physician.

37    On 17 December 2021, the Tribunal made directions for the preparation of the proceeding for hearing by the Tribunal. Relevantly, the Tribunal directed the ACCC to give written notice of the application for review to all persons who made submissions to the ACCC in connection with its determination and to advise them that any application for leave to intervene in these proceedings, and any material relied on in support of any application, must be filed and served on or before 1 February 2022. No applications to intervene were made in response to that notification. The ACCC subsequently discovered that a number of submissions to the ACCC had been overlooked, and a further notice was given to the persons who made those submissions. Again, though, no applications to intervene were made in response to that notification.

Variations to the Authorisation sought by the Authorisation Applicants

38    In accordance with the Tribunal’s directions, on 20 April 2022 the Authorisation Applicants filed and served their Statement of Facts, Issues and Contentions. In response to the Review Applicants’ proposed orders, the Authorisation Applications stated that, to satisfy the concerns raised by the Review Applicants, the Authorisation Applicants would not oppose conditions being imposed that:

(a)    nib will continue to offer the Honeysuckle Health medical gap scheme to medical specialists who choose not to participate in the BCPP and Honeysuckle Health will continue to offer the Honeysuckle Health medical gap scheme to all participants;

(b)    no contract negotiated with, or offered to, individual specialists (whether as part of BCPP or otherwise) will:

(i)    require patients to be discharged to home treatment where the clinician’s reasonable independent assessment is that in-patient treatment is in the patient’s best interests;

(ii)    require any specialist to have regard to any clinical or treatment guidelines formulated by any organisation other than a recognised specialist body representing that area of medical specialisation; or

(iii)    otherwise, in the clinician’s reasonable opinion, have the likely effect of interfering with the clinician’s reasonable independent assessment of the ideal treatment of each patient.

39    However, the Authorisation Applicants also stated that, at the hearing of the review, they would contend that the Tribunal should affirm the ACCC’s decision to grant the Authorisation and otherwise amend the Authorisation such that:

(a)    the period of authorisation is extended from five to ten years; and

(b)    the condition preventing Major PHIs from joining the HH Buying Group be removed in respect of medical specialist contracting.

40    On 12 May 2022, the Tribunal concluded that persons who made submissions to the ACCC in connection with its determination may not have been aware that the Authorisation Applicants may seek to vary the Authorisation to extend its duration and to remove the condition concerning Major PHIs. To ensure procedural fairness, the Tribunal directed the ACCC to give a further written notice to all persons who made submissions to the ACCC in connection with its determination advising them of the variation sought by the Authorisation Applicants and that any application for leave to intervene in these proceedings must be filed and served on or before 19 May 2022.

41    In response to that notice, applications for leave to intervene were received by the Tribunal from the AMA, the RANZCP and the APS, and as stated earlier in these reasons, the Tribunal granted leave to intervene to the AMA, but not to the RANZCP or the APS.

Application to withdraw

42    As noted earlier in these reasons, on 18 July 2022 the Review Applicants filed an application with the Tribunal seeking leave to withdraw their respective applications for review. The application for leave to withdraw was accompanied by a copy of the Original Deed and the Undertaking.

43    The Original Deed contained the following conditions of settlement:

4.1    Application of the conditions of settlement

(a)     In exchange for the Review Applicants obtaining leave from the Tribunal to withdraw their Review Applications and withdrawing their Review Applications, and the Intervenor consenting to this withdrawal, the Authorisation Applicants agree to the conditions prescribed in this clause 4.

(b)     For the avoidance of doubt, unless specifically stated, the conditions contained in clause 4 only apply to the collective activities of the HH Buying Group for the Authorised Period. Nothing in this clause is intended to limit:

(i)    the activities nib is permitted to engage in, in its individual capacity;

(ii)    the services that HH is permitted to provide to a PHI on an individual basis; or

(iii)    the activities of nib, HH or the HH Buying Group beyond the Authorised Period.

4.2     Continuation of a medical gap scheme

Without limiting the restrictions in the Final Determination (particularly the restrictions related to Major PHIs), nib or HH must maintain, and HH must make available to all Participants of the HH Buying Group, a medical gap scheme which must:

(a)     offer medical specialists fees that, as a percentage of the Medical Benefits Schedule Fee, are at least as high as the percentage offered to medical specialists by the nib MediGap scheme as at 1 March 2022;

(b)     otherwise offer medical specialists terms and conditions at least as favourable as the terms and conditions offered to medical specialists by the nib MediGap scheme as at 1 March 2022 unless the term or condition is consistent with general industry terms and conditions for medical gap schemes;

(c)     not require medical specialists to provide Additional Patient Data;

(d)     not require medical specialists to:

(i)    discharge patients to home treatment;

(ii)     refer patients to particular specialists or specialists from a particular group (such as preferred or contracted specialists);

(iii)     refer patients to particular allied health services or allied health services from a particular group (such as preferred or contracted services);

(iv)     treat patients at particular facilities or facilities in a particular group (such as preferred or contracted facilities);

(e)     not vary the fees paid to medical specialists based on whether or not nib or HH has a contract with the facility;

(f)     not include Targets or any right to terminate or not renew a contract with a medical specialist for any failure to meet Targets;

(g)     apart from the published fees being paid under the medical gap scheme, not include any additional incentive (whether financial or otherwise) for performance or patient outcomes;

(h)     allow medical specialists to opt out of the medical gap scheme for individual patients; and

(i)     not be confidential.

4.3     Conditions attaching to the BCPP and other agreements with medical specialists

Without limiting the restrictions in the Final Determination (particularly the restrictions related to Major PHIs), the HH Buying Group must only offer:

(a)     the BCPP; and

(b)     any other alternative agreement with medical specialists that do not meet all the criteria in clause 4.2, to Participants if those agreements:

(c)     do not require medical specialists to have regard to any clinical or treatment guidelines other than those developed or approved by an independent medical specialist body that is relevant to that area of medical specialisation or sub-specialisation;

(d)     expressly acknowledge that any such clinical or treatment guidelines must be interpreted and applied independently by the medical specialist with regard to the individual circumstances and best interests of patients;

(e)     expressly acknowledge the right of medical practitioners to exercise clinical independence at all times in relation to the provision of medical services;

(f)     expressly acknowledge that the HH or the Participant will not interfere with the clinical independence of the medical specialist;

(g)     in relation to any obligation to collect and disclose Additional Patient Data, expressly acknowledge that:

(i)     medical specialists must obtain informed consent to the collection and disclosure of Additional Patient Data to the Participant and HH;

(ii)     a patient can decline to provide consent for the collection and disclosure of Additional Patient Data to the Participant and HH;

(iii)    if a patient declines to provide Additional Patient Data, no attempt should be made by HH or PHIs or third parties to contact patients to enter into alternate data collection arrangements outside the specialist-patient relationship;

(iv)     a patient may not have the capacity to consent to the collection and disclosure of Additional Patient Data to the Participant and HH;

(v)     medical specialists are otherwise not obliged to collect or disclose Additional Patient Data to the Participant and HH where in the medical specialist’s reasonable opinion, the collection and disclosure of such data is not in their patient’s best interests;

(vi)     medical specialists will not be penalised for not collecting and disclosing Additional Patient Data in the circumstances described in subparagraphs (ii) to (v) above, where ‘penalising’ means terminating or deciding not to renew a contract with a medical specialist or otherwise treating a medical specialist less favourably (including by discouraging referrals to them).

(h)     do not require a medical specialist to do any of the following if, in the medical specialist’s reasonable independent assessment, this would not be in the best interests of the patient:

(i)    apply clinical or treatment guidelines;

(ii)     discharge the patient to home treatment;

(iii)     refer the patient to particular medical specialists or medical specialists from a particular group (such as preferred or contracted medical specialists); or

(iv)     refer the patient to particular allied health providers or allied health services from a particular group (such as preferred or contracted services);

(i)     do not impose financial penalties on a medical specialist if they do not do any of the things specified in subparagraph (h) above;

(j)     do not restrict a medical specialist from disclosing the existence of the agreement and its terms (other than prices whether in dollar amounts or percentages of Medicare Benefits Schedule Fee) to: (i) a patient; (ii) the AMA or other relevant professional body; or (iii) the medical specialists’ professional advisors including suppliers of medical indemnity insurance;

(k)     do not include Targets or any right to terminate or not renew a contract with a medical specialist for any failure to meet Targets; and

(l)     apart from:

(i)     the fees being paid for provision of medical services to the patient; and

(ii)     payments for participation in, and facilitation of, Quality Assurance Activities, not include any incentive (whether financial or otherwise) for performance or patient outcomes.

44    The Original Deed also provided, in cl 7, that its terms were confidential, although it permitted certain aspects of cl 4 to be made public by the parties.

45    The Undertaking was signed on behalf of Honeysuckle Health and contained the following statements:

1.     Honeysuckle Health Pty Ltd (HH) expressly acknowledges the legislative obligations conferred on private health insurers by the Private Health Insurance Act 2007 (Cth) (PHI Act) and Health Insurance Act 1973 (Cth) (HI Act).

2.     Further to these obligations, HH undertakes that any medical purchaser provider agreement it offers to participants in the buying group with a medical specialist will:

(a)     only provide for benefits to be paid for 'hospital treatment' and 'general treatment' by the participant as those terms are defined in sections 121-5 and 121-10 of the PHI Act;

(b)     not provide for benefits to be paid by the participant for Medicare services referred to in section 121-10(3) of the PHI Act (unless permitted under the Private Health Insurance (Health Insurance Business) Rules); and

(c)     not result in a participant contravening section 126 of the HI Act.

46    In support of the application for leave to withdraw, on 20 July 2022 the Review Applicants filed written submissions. The submissions relied principally on the facts that each of the parties consented to the withdrawal of the review applications and the ACCC did not oppose the application for leave to withdraw. The submissions did not, though, address the terms of the Original Deed and the effect of its terms.

47    On 22 July 2022, the Tribunal notified the parties of potential issues arising from the terms of the Original Deed by providing the parties with a list of questions to be addressed during the hearing of the application for leave to withdraw (Questions). The Questions were as follows:

1.     What is the significance of the Deed of Settlement and Release (Deed) to the application for withdrawal? In particular:

(a)     Do the terms of the Deed constitute, in effect, either a variation to the authorised conduct or a restriction or condition on the authorised conduct?

(b)     If the answer to (a) is yes:

(i)     Will the terms of the Deed be made public?

(ii)     Should leave to withdraw be refused and the application for authorisation be reviewed in light of the proffered terms of the Deed?

(c)     What is the meaning and effect of clauses 4.2(a), (e) and (g) of the Deed? In particular:

(i)     In what sense does HH make available to Participants of the HH Buying Group a medical gap scheme? Are the clauses intended to constitute a covenant by HH, on behalf of the HH Buying Group, that the HH Buying Group will, during the term of the authorisation, adopt and offer to medical specialists a medical gap scheme that satisfies the conditions listed in clause 4.2?

(ii)     Does clause 4.2(a) constitute a covenant by HH, on behalf of the HH Buying Group, that the medical gap scheme will maintain the level of fees paid to medical specialists? What are the competition implications of such a covenant?

(iii)     Do clauses 4.2(e) and (g) constitute a covenant by HH, on behalf of the HH Buying Group, to restrict the manner of setting fees paid to medical specialists? What are the competition implications of such a covenant?

2.     What is the significance of the Honeysuckle Health Undertaking to the application for withdrawal? In particular:

(a)     To whom is the Undertaking given?

(b)     Is the Undertaking intended to be enforceable and, if so, by whom?

(c)     Do the terms of the Undertaking constitute, in effect, either a variation to the authorised conduct or a restriction or condition on the authorised conduct?

(d)     If the answer to (c) is yes:

(i)     Will the terms of the Undertaking be made public?

(ii)     Should leave to withdraw be refused and the application for authorisation be reviewed in light of the proffered terms of the Undertaking?

(e)     What is the meaning and effect of clause 2 of the Undertaking? In particular:

(i)     In what sense does HH offer medical purchaser provider agreements to participants in the HH Buying Group? Are the undertakings intended to constitute a covenant by HH, on behalf of the HH Buying Group, that any medical purchaser provider agreement offered to medical specialists by the HH Buying Group will satisfy the conditions listed in clause 2?

(ii)     What is the effect of each of clauses (a), (b) and (c)? Do the clauses restrict commercial freedoms that would exist absent the clauses? What are the competition implications of any such restrictions?

48    During the hearing of the application, the parties informed the Tribunal that the Undertaking was not intended to be an undertaking to the Tribunal, and that the undertakings themselves went no further than current legal obligations under the HI Act read with the PHI Act. On that basis, it was unnecessary for the Tribunal to consider the Undertaking or the questions that related to it.

49    As mentioned earlier, following the hearing of the application for leave to withdraw, the parties entered into and provided to the Tribunal the Revised Deed. Most relevantly, the Revised Deed removed cll 4.2(a), 4.2(b) and 7. The consequences of those amendments are dealt with in the ‘Consideration’ section of these reasons.

Power to grant leave to withdraw

50    The Tribunal recently explained the basis of its power to permit an applicant for review to withdraw its application in Application by Controlabill Pty Ltd [2021] ACompT 6 (Controlabill).

51    As noted in Controlabill, the Tribunal has granted leave for the withdrawal of an application for review made under s 101 of the Act on a number of previous occasions: see Re Country Television Services Limited (1984) 73 FLR 68 (Country Television Services); Re Nursing Agencies Association of Australia [2003] ACompT 2; 175 FLR 423; Re Football Queensland Limited [2012] ACompT 15. As observed in each of those decisions, there is no express power in Pt IX of the Act or the Competition and Consumer Regulations 2010 (Cth) governing the withdrawal of an application for review made under s 101 of the Act. Section 102 addresses the powers of the Tribunal in respect of the substantive determination of the review and provides that the Tribunal may make a determination affirming, setting aside or varying the ACCC’s determination and, for the purposes of the review, may perform all of the functions and exercise all of the powers of the ACCC.

52    Nevertheless, the Act contemplates that an application for review under s 101 may be withdrawn. Relevantly, and in respect of the Authorisation under review in this proceeding, s 91(1A) provides that an authorisation granted by the ACCC comes into force on the day specified for the purpose in the authorisation, not being a day earlier than:

(a)    where para (b) or (c) does not apply – the end of the period in which an application may be made to the Tribunal for a review of the determination by the Commission of the application for the authorisation;

(b)    if such an application is made to the Tribunal and the application is not withdrawn – the day on which the Tribunal makes a determination on the review;

(c)    if such an application is made to the Tribunal and the application is withdrawn – the day on which the application is withdrawn.

53    The effect of s 91(1A) is that an authorisation granted by the ACCC will not come into force while there is an application for review before the Tribunal, but the authorisation will come into force if the application for review is withdrawn.

54    In each of the Tribunal decisions referred to earlier, the presiding member of the Tribunal concluded that an applicant for review does not have an unfettered right to withdraw an application, but the Tribunal has power under s 103(1)(a) of the Act to grant leave to the applicant to withdraw. Section 103(1)(a) stipulates that, in the conduct of a review, the procedure of the Tribunal is within the discretion of the Tribunal. In Country Television Services, Lockhart J observed (at 70):

Rules of court generally provide for the discontinuance of proceedings and they define the circumstances in which a moving party may discontinue as of right or by leave. No such provision appears in the Act or the Trade Practices Regulations governing proceedings before the Tribunal. The withdrawal of applications raises difficult concepts and has been the subject of some discussion by courts in various contexts, including bankruptcy proceedings, where petitioning creditors have sought the court’s leave to withdraw petitions to sequestrate a debtor’s estate, rather than an order of the court that they be dismissed. … Although procedures before courts, including bankruptcy petitions, are different in nature to applications for review before the Tribunal, they nevertheless suggest that caution should be exercised before deciding that an applicant for review has a right to withdraw his application so that, upon the withdrawal taking effect according to its terms, the Tribunal's functions and powers thereupon cease. The proceedings before the Tribunal are not merely inter partes: they involve the public interest.

55    The Tribunal respectfully agrees with the conclusions expressed by the Tribunals in each of the decisions referred to above.

56    The considerations that are relevant to the Tribunal’s discretion in respect of an application for leave to withdraw must be determined by implication from the subject matter, scope and purpose of the Act: Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 39-40 per Mason J. Two such considerations should be noted. First, s 2 of the Act states that the object of the Act is to enhance the welfare of Australians through the promotion of competition and fair trading and provision for consumer protection. Second, a review of the ACCC’s determination by the Tribunal is a de novo review and the Tribunal must reach its own decision whether authorisation should be granted and for what period and on what conditions. The relevant test for authorisation in this proceeding is found in s 90(7)(b) which stipulates that authorisation must not be granted unless, relevantly, the Tribunal is satisfied that the conduct would be likely to result in a benefit to the public and the benefit would outweigh the detriment to the public that would be likely to result from the conduct. It follows that, in considering whether to grant leave to withdraw the review application, the Tribunal will ordinarily have regard to the potential implications of its decision for competition, fair trading, consumer protection and the public benefits or detriments resulting from the conduct the subject of the authorisation.

Submissions on the question of leave

57    The submissions advanced by the parties and the ACCC on the question of leave to withdraw addressed the provisions of the Original Deed. As noted earlier, following the hearing of the application for leave to withdraw, the parties informed the Tribunal that they proposed to amend the Original Deed and ultimately entered into the Revised Deed. To explain the Tribunal’s reasoning, it is relevant to refer to the submissions made by the parties with respect to the Original Deed.

ACCC’s submissions as contradictor

58    The ACCC’s formal position on the application was that it neither opposed nor consented to the grant of leave. As mentioned earlier, the Tribunal made a direction pursuant to s 102(6) of the Act requiring the ACCC to furnish assistance to the Tribunal by acting in the capacity of a contradictor to represent the interests of Australians as acquirers of health insurance services (ie, the interests of consumers). Acting in accordance with that direction, the ACCC filed written submissions in advance of the hearing and made supplementary submissions during the hearing. The principal submissions advanced by the ACCC in its capacity as contradictor were as follows.

59    Accepting the principles from Controlabill set out above, the ACCC referred to two matters in particular as being relevant to whether it was in the public interest for the applications to be granted:

(a)    fairness to, and the interests of, persons other than the parties and intervenor; and

(b)    the potential for the grant of leave to result in harm to competition or other relevant species of harm to the public interest.

60    In relation to the first matter, the ACCC highlighted the extent of community interest and opposition to the authorisation application. Before making its determination to grant authorisation, the ACCC received 498 separate submissions by 442 separate parties. The majority of those parties opposed the conduct being authorised. Although interested persons were given the opportunity to intervene in these proceedings and (except for three parties) they did not apply for leave to intervene, the ACCC submitted that at least some of those interested persons may not have appreciated the potential for the review applications to be withdrawn and may have assumed that the applications would be determined by the Tribunal.

61    In relation to the second matter, the ACCC submitted that cl 4 of the Original Deed imposes various restrictions on the conduct that the Authorisation Applicants would or may engage in by reason of the ACCC’s Authorisation, which restrictions only take effect if the leave application is allowed. When considering whether to grant authorisation, the ACCC did not consider whether the proposed conduct, with conditions or limitations of that kind, should be authorised. It conducted no analysis as to whether those conditions or limitations might lessen competition, or add to or detract from the benefits that it found would result from the authorised conduct. The ACCC submitted that the obligations in the Original Deed are relevant to the Tribunal’s decision whether to grant leave, and if the Tribunal considers that giving effect to any of those obligations would be likely to, or may, result in a lessening of competition or other detriment, it is unlikely to be satisfied that it is in the public interest for leave to be granted.

62    In relation to specific provisions of the Original Deed, the ACCC drew attention to cl 4.2 which provided that Honeysuckle Health must make available to all participants of the HH Buying Group a medical gap scheme which meets certain requirements. The ACCC submitted that some of those requirements appeared to be intended to provide certain minimum benefits to medical specialists, and appeared capable of leading to a lessening of competition amongst medical specialists with respect to those benefits. In particular, cl 4.2(a) provided that the medical gap scheme must offer, to medical specialists, fees that are above a particular level. The ACCC submitted that there is a question whether this would be likely to have the effect of setting a floor for or otherwise controlling the fees that participants in the HH Buying Group offer to medical specialists, and therefore limiting competition amongst medical specialists based on the fees they receive. Additionally, cl 4.2(b) provided that the medical gap scheme must offer medical specialists terms and conditions at least as favourable as the terms and conditions offered to medical specialists by the nib MediGap schemes as at 1 March 2022, unless the term or condition is consistent with general industry terms and conditions for medical gap schemes. The ACCC submitted that there is a question whether this would be likely to have the effect of setting minimum terms and conditions that medical specialists will receive, and therefore limiting competition amongst medical specialists on those terms and conditions.

63    The ACCC submitted that significant inquiry is likely to be required to determine whether or not the conditions imposed by cl 4.2 would be likely to lessen competition. By way of example, in relation to cl 4.2(a) of the Original Deed, it may be necessary to understand matters such as:

(a)    the number of entities that are likely to form part of the HH Buying Group and their market shares;

(b)    whether they will be required to use the medical gap scheme made available by Honeysuckle Health and, if not, the likelihood of them using it;

(c)    the extent to which medical specialists are likely to register for the medical gap schemes made available by the HH Buying Group;

(d)    whether (and, if so, in what ways) medical specialists may compete based on the fees offered to them in medical gap schemes; and

(e)    the fees that members of the HH Buying Group are likely to offer in their medical gap schemes if not for the Deed.

64    The ACCC further submitted that other provisions of cl 4.2 could undermine the public benefits identified by the ACCC in its Determination. In particular, cl 4.3(g) limits the ability of participating PHIs to require medical specialists to provide patient data, which could undermine the public benefits of improved access to information for smaller PHIs. Additionally, cl 4.3(k) prevents participating PHIs from including targets or consequences for failing to meet targets in contracts with medical specialists, which could undermine the public benefits of increased availability of no gap experience for consumers.

65    It was submitted that determining whether or not giving effect to the obligations in the Original Deed would be in the public interest was likely to be complex and time consuming. In the ACCC’s submission, the need for such inquiries suggests that the Tribunal should not be satisfied that it is in the public interest to allow the leave application.

66    The ACCC observed that the withdrawal application was predicated on the Original Deed coming into force and that would only occur if leave were granted. Accordingly, it could be assumed that, should leave not be granted, the Review Applicants would continue with the review application (and so the Tribunal would not be faced with the issue of having a proceeding where no applicant was willing to participate substantively).

67    Finally, the ACCC noted that, if the leave application were allowed and the Original Deed came into effect, the Original Deed would not be authorised by the ACCC and so its effect may be investigated by the ACCC at a later stage. In addition, making and/or giving effect to the Original Deed may constitute a “material change of circumstances” within the meaning of s 91B(3) of the Act so as to enable the ACCC to commence a process that could lead to revocation of the ACCC’s Authorisation under s 91B(4) of the Act.

Review Applicants’ Submissions

68    The Review Applicants’ written submissions filed prior to the hearing were brief. They relied on the facts that each of the parties consented to the withdrawal of the review applications, and that the ACCC did not oppose the application for leave to withdraw. It was submitted that, in those circumstances, there was no reason why they should be prevented from withdrawing their applications for review. After receipt of the Tribunal’s Questions, the Review Applicants’ oral submissions at the hearing of the application considered in greater detail the issues that concerned the Tribunal.

69    The Review Applicants submitted that they had commenced these proceedings chiefly because they were concerned to ensure that non-economic detriments pertaining to clinical independence would be properly considered in these review proceedings. The Review Applicants have been able to come to an agreement with the AMA and the Authorisation Applicants in the form of the Original Deed which minimises those detriments and does so in a way that falls squarely within the conduct authorised by the ACCC in its determination.

70    The Review Applicants submitted that the terms of the Original Deed did not constitute, in effect, either a variation to the authorised conduct or a restriction or condition on the authorised conduct. With respect to the medical gap scheme to be offered under cl 4.2 of the Original Deed, the Review Applicants submitted that such a gap scheme being extended to participants in the HH Buying Group was specifically contemplated by the Authorisation.

71    In relation to the effect of cl 4.2 of the Original Deed, the Review Applicants submitted that the overriding rationale for the clause was to obligate Honeysuckle Health to put forward a medical gap scheme that would be a viable alternative to the BCPP and was not financially disadvantageous to medical specialists.

72    In relation to the potential competitive effect of cl 4.2(a), the Review Applicants submitted that the clause would not harm competition because it did not preclude other medical gap schemes being offered to medical specialists by nib, Honeysuckle Health or other PHIs.

73    As to cl 4.2(e), which requires that the medical gap scheme “not vary the fees paid to medical specialists based on whether or not nib or Honeysuckle Health has a contract with the facility”, the Review Applicants submitted that this was designed to maintain clinical independence so that medical specialists could assess which facility is best for treatment, without consideration for any differing fees payable by the relevant PHI.

74    As to cl 4.2(g), which requires that the medical gap scheme not include any additional incentive (whether financial or otherwise) for performance or patient outcomes”, the Review Applicants submitted that the purpose of the clause was to remove additional financial incentives that may interfere with clinical independence to assess the best treatment for the patient in each case.

75    It was also submitted that, insofar as the Tribunal considered that cl 4.2 of the Original Deed may have anti-competitive or other detriments, it was a matter for the ACCC to consider the terms of the Authorisation and the extent to which the Original Deed falls outside the authorised conduct.

76    In relation to the confidentiality of the Original Deed, the Review Applicants confirmed that they had no objection to the terms of the Original Deed being made public.

77    In response to the ACCC’s submissions regarding the public interest in affording procedural fairness to interested persons not party to this proceeding, the Review Applicants submitted that the fact that there was significant community participation in the authorisation process does not ultimately bear upon the Tribunal’s decision. The persons who made submissions during the authorisation process had the opportunity either to make their own review application or to apply for leave to intervene. Apart from three bodies, no other persons applied to intervene. The AMA applied and was granted leave to intervene. The two parties not granted leave to intervene – the RANZCP and APS – were not granted leave on the basis that their interests would be protected by the Review Applicants, and it was not identified by the ACCC how these two parties’ interests were now negatively affected by the Original Deed.

78    The Review Applicants confirmed that if leave to withdraw was not granted, then they would continue with the review application, as the settlement conditions under the Original Deed were conditional on such leave being granted. The Review Applicants also submitted, however, that should leave to withdraw be refused, and even though the Original Deed would no longer be operational, the Tribunal should conduct the review in light of the proposed terms of the Original Deed and could consider varying the Authorisation to impose conditions of the sort contained in the Original Deed as a way to address the detriments raised by the review application.

AMA’s Submissions

79    The AMA supported the Review Applicants leave applications. The AMA submitted that the terms of the Original Deed ameliorate the public detriments arising from the Authorisation, and provided further benefits that would not be able to be obtained before the Tribunal in these proceedings.

80    The AMA accepted that cl 4.3 of the Original Deed constitutes a variation, restriction or condition on the authorised conduct under the Authorisation, but submitted that cl 4.2 did not because the authorised conduct related to the administration of medical gap schemes entered into and not the negotiation of those schemes.

81    The AMA made submissions as to the rationale and effect of cll 4.2 and 4.3 which were of similar content to the Review Applicants’ submissions, and also referred to the ACCC’s powers to consider the terms of the Original Deed itself if the Tribunal granted leave to withdraw this proceeding. Additionally, the AMA submitted that:

(a)    In relation to cl 4.2(a), the AMA submitted that the dynamic in the market is typically characterised by the specialist seeking greater remuneration and that there was no likely competition dynamic driving specialist fees down and no such environment was envisaged by the AMA.

(b)    In relation to cl 4.2(e), the AMA submitted that the context of this clause was the AMA’s concern that contracts between PHIs and specialists could be used as leverage in negotiations between PHIs and hospitals, and so cl 4.2(e) ensured that specialists could not be used as a “bargaining chip” in this way.

82    The AMA had no objection to the terms of the Original Deed being made public.

83    Contrary to the Review Applicants, the AMA submitted that, if leave to withdraw was not granted, the Tribunal should not have regard to the proposed terms of the Original Deed.

Authorisation Applicants’ Submissions

84    The Authorisation Applicants supported the Review Applicants’ leave applications and advanced the following submissions at the hearing of the applications.

85    First, although the review proceeding was not regular commercial inter partes litigation, an important part of the public interest for the Tribunal to take into account is the public interest in the resolution of controversies as expeditiously and cost-effectively as possible. Given that each of the parties and the intervener had agreed on a compromise, and the ACCC would not seek to have its own determination set aside, the Tribunal should be slow to require the parties to take part in a hearing which would entail substantial private and public costs.

86    Second, s 101(1A) of the Act expressly authorised the Tribunal to make a review determination by consent of the parties, the ACCC and all interveners whether or not the Tribunal is itself satisfied of the net public benefits test under s 90(7) of the Act, which reveals a legislative intention that the Tribunal is not required to be so satisfied for the purposes of granting leave to withdraw an application where there is no opposition to the leave application.

87    Third, if leave to withdraw were granted, the ACCC would be able to consider and investigate the implications of the Original Deed according to its own processes, which would be the most convenient and cost-effective course, whether in respect of a revocation of the Authorisation under s 91B or in respect of any Pt IV contravention.

88    Fourth, although RANZCP and APS were not granted leave to intervene, they were each granted permission to file a submission. Only RANZCP did so. Its submission opposed the variations to the Authorisation sought by the Authorisation Applicants. However, if leave to withdraw is granted, the issue of variations falls away. Issues regarding clinical independence have been resolved by the Original Deed. There is no procedural unfairness to persons who participated in the authorisation process but did not seek to intervene in the review proceeding.

89    Fifth, in relation to the substantive terms of the Original Deed and the operation of the net public benefits test in light of the Original Deed, the Authorisation Applicants submitted that they could enter into a contract containing terms such as those in the Original Deed at any time after the Authorisation comes into effect, and that the Authorisation does not require them to engage in the full scope of authorised conduct.

90    Sixth, the Authorisation Applicants submitted that the terms of the Original Deed largely reflect what they would have done in any event. The Authorisation Applicants’ position in this proceeding was always that they would not oppose the conditions sought by the Review Applicants concerning clinical independence. While aspects of cl 4.2 go further than merely addressing issues of clinical independence, the Authorisation Applicants submitted that the evidence filed in the proceeding showed that they always intended to maintain the offer of existing medical gap schemes for specialists. The intention was never for the BCPP to replace those existing gap schemes.

91    In relation to cll 4.2(a) and (b) specifically, the Authorisation Applicants submitted that, while the Original Deed binds nib and Honeysuckle Health, the Original Deed does not purport to bind any other PHI. A participant PHI would be free to offer its own medical gap scheme with different terms to the scheme contemplated by cl 4.2 of the Original Deed. It was therefore submitted that cll 4.2(a) and (b) did not have the effect of restricting prices participant PHIs could offer to medical specialists.

92    The Authorisation Applicants confirmed that they did not oppose publication of the terms of the Original Deed by the Tribunal.

Consideration

93    As Lockhart J observed in Country Television Services (at 70), proceedings before the Tribunal are not merely inter partes; they involve the public interest. The Tribunal’s discretionary power to grant leave to an applicant to withdraw an application for review is to be exercised having regard to the subject matter, scope and purpose of the Act. The Tribunal will ordinarily have regard to the potential implications of the grant of leave for competition, fair trading, consumer protection and the public benefits or detriments resulting from the conduct the subject of the authorisation.

94    In many cases, the grant of leave to withdraw will be relatively straightforward. As observed by the Tribunal in Controlabill, in circumstances where the only persons who have applied to review the ACCC authorisation wish to withdraw their application, and no-one opposes that course, there will be no reason why the Tribunal should not grant leave. To that extent, the Tribunal accepts that there is a public interest in the resolution of controversies as expeditiously and cost-effectively as possible.

95    In the present case, however, the parties’ respective agreement to withdraw the review applications and to consent to the withdrawal was initially subject to the terms of the Original Deed. Clause 4.1(a) of the Original Deed stipulated that the covenants in the Deed were given in exchange for the Review Applicants obtaining leave from the Tribunal to withdraw their review applications. It followed that the Tribunal’s grant of leave would bring the operative terms of the Original Deed into effect. The converse is also true: if the Tribunal were to refuse leave, the terms of the Original Deed would not come into effect. The Review Applicants confirmed that, if the Tribunal were to refuse leave to withdraw, they would proceed with their applications for review. Accordingly, the present case is unlike the circumstances in Controlabill.

96    As submitted by the ACCC, the Original Deed imposed restrictions on the commercial decisions of the proposed HH Buying Group: the terms restricted or modified commercial behaviour that the HH Buying Group would otherwise be free to engage in by reason of the ACCC’s Authorisation. While the Original Deed was only directly binding on Honeysuckle Health and nib and not the participants in the HH Buying Group, cl 4.1(b) stipulated that the conditions contained in cl 4 applied to the collective activities of the HH Buying Group for the period of the Authorisation. As discussed in more detail below, cl 4.2 imposed mandatory obligations on Honeysuckle Health, in its capacity as administrator of the HH Buying Group, to make available to participants a medical gap scheme that complies with the conditions in that clause. Clause 4.3 required Honeysuckle Health, in its capacity as administrator of the HH Buying Group, to ensure that the BCPP and any other alternative agreement with medical specialists offered by the HH Buying Group complied with the conditions in that clause.

97    The Original Deed had a similar effect to the imposition of conditions on the grant of authorisation. The effect of granting leave, therefore, would be to terminate the review of the Authorisation while at the same time bringing into force restrictions on the HH Buying Group. The Tribunal considers that that should only occur with due assessment of the potential detriments of the restrictions.

98    It can be accepted, as submitted by the Authorisation Applicants, that the parties to the Original Deed would have been free to enter into the terms of the Deed at any time during the period of the Authorisation. The burden of the submission, however, appeared to be that the Original Deed represented the exercise of commercial and contractual freedom; in other words, the parties to the Original Deed are free to enter into commercial arrangements that they perceive to be mutually beneficial. The implied contention was that, if the parties are free to enter into such arrangements after the Tribunal grants leave to withdraw, the fact that the Original Deed was entered into contemporaneously with the application for leave to withdraw should not affect the consideration of the application. The Tribunal does not accept that contention. It overlooks the fact that the consideration given by the Review Applicants and the AMA in the Original Deed, in exchange for the covenants given by Honeysuckle Health (and nib), was the agreement to withdraw the review applications and to consent to the withdrawal (respectively). That fact renders the prospect of similar covenants being given by Honeysuckle Health (and nib) in the future a hypothetical possibility only. The Tribunal is required to consider the application for leave to withdraw in circumstances where the grant of leave brings the covenants into effect.

99    It can also be accepted, as submitted by the Authorisation Applicants (and also acknowledged by the ACCC), that if leave to withdraw were granted, the ACCC would be able to consider and investigate the implications of the Original Deed according to its own processes. The ACCC has general power to consider any anti-competitive effects of the Original Deed under the provisions of Pt IV of the Act; further, under s 91B of the Act, the ACCC is empowered to initiate a process that may lead to the revocation of the Authorisation if the ACCC considered that the Original Deed has brought about a material change in circumstances since the Authorisation was granted. The Tribunal recognises that the powers of the ACCC to investigate the effects of the Original Deed in the context of the Authorisation are an important safeguard to protect the public interest. In that regard, the Tribunal acknowledges that its ability to investigate the potential anti-competitive or other detriments (and any countervailing benefits) arising from the Original Deed in the context of an application for leave to withdraw are somewhat limited. Nevertheless, the Tribunal considers that the proper exercise of its power to grant leave requires it to have regard to any immediately apparent anti-competitive or other detriments arising from the Original Deed.

100    The Original Deed stipulated that the terms of the Deed were confidential (although the Original Deed permitted the parties to publish certain statements to their members with respect to the effect of the Deed). At the hearing of the leave application, each of the parties to the Original Deed confirmed that they had no objection to the publication of the terms of the Deed if the Tribunal considered that that was necessary in connection with the grant of leave to withdraw. No party advanced a submission that publication of the terms of the Original Deed would be contrary to the public interest. In those circumstances, the Tribunal has concluded that the terms of the Original Deed should be made public. As stated earlier, the terms of the Original Deed stated the basis upon which the Review Applicants had agreed to withdraw their applications for review of the Authorisation and the AMA had agreed to support the withdrawal. The terms of the Original Deed have a similar effect to the imposition of conditions on the grant of the Authorisation. Conditions imposed on the grant of authorisation would ordinarily be on the public record. The Tribunal considers that there is a public interest in disclosing the terms of the Original Deed so that the basis of the withdrawal of the review applications can be understood and any ongoing restrictions on the commercial behaviour of the HH Buying Group are publicly known.

101    The Tribunal notes the following features of the covenants given in cll 4.2 and 4.3 of the Original Deed.

102    First, cll 4.2 and 4.3 are directed to the two main categories of commercial arrangements that PHIs reach with medical specialists. Clause 4.2 is concerned with medical gap schemes while cl 4.3 is concerned with the BCPP and other agreements with medical specialists, typically MPPAs. As discussed earlier, the BCPP is a particular form of arrangement currently offered by nib whereby MPPAs are entered into with all of the medical specialists involved in a single episode of hospital treatment so that there is no “gap” fee payable by the patient for the range of medical services provided during that episode of treatment.

103    Second, cl 4.1(b) stipulates that (unless specifically stated to the contrary) the restrictions in cll 4.2 and 4.3 do not apply to the activities nib is permitted to engage in (in its individual capacity) or the services that Honeysuckle Health is permitted to provide to a PHI on an individual basis. However, cl 4.2 does expressly impose a restriction on nib (acting in its individual capacity), as well as imposing a restriction on Honeysuckle Health in its capacity as administrator of the HH Buying Group. The restriction in the case of nib is to maintain a medical gap scheme which meets the criteria in cl 4.2. The restriction in the case of Honeysuckle Health is to “make available” to all participants in the HH Buying Group a medical gap scheme which meets the conditions in cl 4.2.

104    Third, cl 4.3 requires the HH Buying Group to only offer the BCPP, or other arrangements with medical specialists, that comply with the requirements of cl 4.3. Although the clause is expressed so as to bind the HH Buying Group, necessarily the clause can only bind Honeysuckle Health in its capacity as administrator of the HH Buying Group. The effect of the clause is to require Honeysuckle Health, in that capacity, to only offer to participants in the HH Buying Group a BCPP or other MPPA that complies with the conditions in cl 4.3.

105    Fourth, many of the conditions in cll 4.2 and 4.3 are directed to the protection of clinical independence by medical practitioners. Dealing first with cl 4.3, the Tribunal is satisfied that the conditions imposed by cl 4.3(c)-(l) are directed at addressing the concerns of the Review Applicants and the AMA in relation to the clinical independence of medical specialists when providing medical services pursuant to the BCPP or MPPAs more generally. Those parties accept that these conditions sufficiently address these concerns, and it is not claimed by the ACCC as contradictor that these conditions cause any public detriment. It is not apparent to the Tribunal that any harm to competition or the broader consumer or public interest arises from those conditions.

106    Turning to cl 4.2, the conditions imposed by cl 4.2(a)-(i) have a somewhat different form to those imposed by cl 4.3. The overall tenor of the conditions in cl 4.2 is to maintain the status quo with respect to nib’s existing medical gap scheme. The Review Applicants and AMA confirmed that that is the principal purpose of the conditions. Those parties explained that the medical specialists whom they represent have a concern about the terms that may be offered by the HH Buying Group pursuant to the BCPP or other MPPAs, and the medical specialists wish to maintain a safeguard, being the availability of a medical gap scheme which is no less favourable than the scheme currently offered by nib. The rationale of cl 4.2 is to ensure that the financial and other contractual terms of the medical gap scheme are sufficiently attractive so as to present medical specialists with a true alternative to the BCPP or MPPAs offered by the HH Buying Group.

107    It is understandable that medical specialists may be apprehensive about the commercial offers that may be made by the HH Buying Group in the future. Nevertheless, imposing contractual restrictions to maintain the status quo, as a condition of withdrawing the review applications, may be contrary to the public interest. In that respect, the Tribunal had particular concerns in relation to paras (a) and (b) of cl 4.2 which stipulated that the medical gap scheme which was to be maintained by nib and made available by Honeysuckle Health to the HH Buying Group:

(a)    offered medical specialists fees that, as a percentage of the MBS Schedule Fee, were at least as high as the percentage offered to medical specialists by the nib MediGap scheme as at 1 March 2022; and

(b)    otherwise offered medical specialists terms and conditions at least as favourable as the terms and conditions offered to medical specialists by the nib MediGap scheme as at 1 March 2022 unless the term or condition is consistent with general industry terms and conditions for medical gap schemes.

108    The effect of those paragraphs was to maintain the prices, and the benefit of other terms, offered by nib through its medical gap scheme and to require Honeysuckle Health to make available the same terms in a gap scheme offered to the HH Buying Group. The Tribunal was concerned about the potential anti-competitive effect of those clauses. On their face, the clauses would prevent nib from reducing medical specialist fees offered through its medical gap scheme even if its competitors reduced the fees offered through their medical gap schemes. Similarly, the clauses would require Honeysuckle Health to continue to make available to the HH Buying Group a gap scheme with the same terms even if competing PHIs reduced the fees offered in their schemes.

109    In response to the Tribunal’s concerns, the parties advanced three principal submissions.

110    First, the parties submitted that nib and Honeysuckle Health (as administrator of the HH Buying Group) would be free to make such promises to medical specialists, and to maintain the current medical gap scheme, regardless of the Original Deed; the decision to do so is a competitive choice for nib and Honeysuckle Health. The Tribunal accepts that that is a choice that would be open to nib and Honeysuckle Health in the future, but it would not be a choice encumbered by an agreement with three medical associations entered into in return for the withdrawal of a review application before the Tribunal. It is not possible to disconnect the covenants given in the Original Deed from the application for leave to withdraw. As discussed earlier, the effect of the Original Deed, if leave to withdraw is granted, is to bring the Authorisation into effect in circumstances where the commercial freedom of the Authorisation Applicants is encumbered by the covenants in the Deed.

111    Second, the AMA submitted that the market for specialist medical services is typically characterised by specialists seeking greater remuneration and that the AMA did not envisage an environment in which specialist fees would be driven down by competition. The Tribunal places no weight on that submission. The AMA’s description of the current market environment and degree of competition for the supply of specialist medical services by specialists may or may not be accurate. Regardless, that is no reason to damage further the potential for competition to place downward pressure on the fees charged by medical specialists (even if the principal barriers to competition for the supply of specialist medical services arise elsewhere).

112    Third, the parties submitted that the conditions in cl 4.2, and paras (a) and (b) in particular, would have little if any effect on competition because individual participants in the HH Buying Group are not compelled by the Original Deed to offer a medical gap scheme that complies with those conditions. The obligation in cl 4.2, in so far as it applies to Honeysuckle Health in its capacity as administrator of the HH Buying Group, is only to make available to participants a gap scheme in that form. Participants are free to participate in that gap scheme, or offer their own medical gap scheme on different terms. The Tribunal accepts that participants in the HH Buying Group are not obligated to acquire specific services from Honeysuckle Health and may choose whether to participate in a medical gap scheme proposed by Honeysuckle Health. However, Mr Du Plessis’ evidence (filed on behalf of the Authorisation Applicants) is that the HH Buying Group will offer the existing nib medical gap scheme to participants and, following authorisation, replace the nib scheme with a new Honeysuckle Health scheme (see affidavit para 189). That evidence is consistent with the terms of the ACCC authorisation (at [1.32] and [1.33], extracted earlier). Mr Du Plessis’ evidence (at para 177(a)) is that PHIs that currently outsource their contracting services to AHSA or ARHG are those most likely to join the HH Buying Group. A ready inference is that those PHIs are unlikely to maintain their own separate medical gap schemes.

113    As submitted by the ACCC, the potential anti-competitive effect of paras (a) and (b) of cl 4.2 would require an examination of the likely market conditions and behaviour including such matters as: the number of participants likely to join the HH Buying Group and their market shares; the likelihood of participants joining the medical gap scheme offered by Honeysuckle Health pursuant to cl 4.2; the extent to which medical specialists are likely to register for the medical gap scheme made available by the HH Buying Group; the likely response of medical specialists, including particularly whether medical specialists would register with medical gap schemes offered by smaller PHIs on less favourable terms than the nib scheme in circumstances where nib is compelled to maintain its scheme; and the potential effect of the conditions on the competitive behaviour of the Major PHIs. As at the date of the hearing of the application for leave to withdraw, the Tribunal had not received material of sufficient depth or cogency to satisfy it that the restrictions contained in paras (a) and (b) of cl 4.2 of the Original Deed would have no material anti-competitive effect or would not otherwise cause public detriments.

114    As noted earlier, following the hearing of the application for leave to withdraw, the parties notified the Tribunal that they proposed to amend the Original Deed by removing paras (a) and (b) of cl 4.2. The Tribunal also invited the parties to remove the confidentiality clause. The parties subsequently entered into and provided to the Tribunal the Revised Deed with those changes. In light of those amendments, it is unnecessary for the Tribunal to express any concluded view about the potential anti-competitive detriment associated with those paragraphs.

115    The Tribunal has given consideration to the potential anti-competitive or other detriments arising from the other conditions in cl 4.2 of the Original Deed (which remain in the Revised Deed, although renumbered). The Tribunal generally accepts the submissions of the Review Applicants and the Authorisation Applicants that the object of most of the remaining conditions is to protect the clinical independence of medical practitioners. That is most apparent in the case of paras (d), (e) (f) and (g) (which are renumbered as paras (b), (c), (d) and (e) in the Revised Deed). As to the other remaining clauses, the Tribunal has made the following assessment:

(a)    Paragraph (c) (renumbered as para (a) in the Revised Deed) stipulates that the medical gap scheme offered by nib, and made available by Honeysuckle Health to the HH Buying Group, must not require medical specialists to provide Additional Patient Data (which is defined as data other than data of the kind currently collected by PHIs pursuant to medical gap schemes for the purposes of verifying claims and meeting regulatory requirements). That restriction appears to conflict with one of the public benefits of the Authorisation as identified by the ACCC, being improved access to information for smaller PHIs through the option to utilise data analytics based on aggregated data of all members of the buying group, which would not otherwise be available to those PHIs and which would likely assist them to develop and offer more competitive insurance products and services. Overall, the Tribunal considers that the likely effect of para (c) is not of sufficient materiality to warrant a refusal of leave to withdraw. In reaching that conclusion, the Tribunal has taken into account the facts that the Authorisation is for a period of five years and the ACCC has power to consider whether the provisions of the Revised Deed cause a material change in circumstances” pursuant to s 91B of the Act or would otherwise contravene Pt IV of the Act.

(b)    Paragraph (h) (renumbered as para (f) in the Revised Deed) stipulates that the medical gap scheme offered by nib, and made available by Honeysuckle Health to the HH Buying Group, must allow medical specialists to opt out of the medical gap scheme for individual patients. The condition goes no further than preserving the freedom of medical practitioners to choose the commercial terms on which they will treat individual patients.

(c)    Paragraph (i) (renumbered as para (g) in the Revised Deed) stipulates that the medical gap scheme offered by nib, and made available by Honeysuckle Health to the HH Buying Group, must not be confidential. It is difficult to conceive how a medical gap scheme, which is offered to medical specialists, could be confidential.

116    Finally, the Tribunal considers that the grant of leave to withdraw on the terms of the Revised Deed would not be procedurally unfair to persons who participated in the ACCC authorisation process but did not become a party to these proceedings. The ACCC’s reasons for determination indicate that a large number of persons made submissions to the ACCC opposing the Authorisation, the majority of which were from bodies representing medical specialists or from individual medical specialists likely to be affected by the authorised conduct. All such persons were given an invitation to intervene in the review proceeding but almost all (save for the AMA, RANZCP and the APS) elected not to do so. The Tribunal does not consider that such persons have a general right to be heard on an application for leave to withdraw. There may be circumstances where the Tribunal considers it appropriate to invite submissions from other interested persons. In the present case, however, the grant of leave to withdraw will not alter the terms of the ACCC’s Authorisation, save that the grant of leave will bring the Revised Deed into effect. The Tribunal does not consider that the remaining conditions in the Revised Deed are likely to have a material adverse effect on the interests of medical specialists who participated in the ACCC authorisation process to oppose the Authorisation.

Conclusion

117    In conclusion, the Tribunal is satisfied that it is appropriate to grant leave to the Review Applicants to withdraw their applications for review to the Tribunal.

118    The Tribunal also wishes to express its appreciation to counsel and solicitors who represented the Review Applicants pro bono. It is very difficult for a person to conduct a review in this jurisdiction without legal representation, and the pro bono assistance that was provided to the Review Applicants enabled the relevant issues to be addressed with efficiency and clarity.

I certify that the preceding one hundred and eighteen (118) numbered paragraphs are a true copy of the Reasons for Determination of the Honourable Justice O'Bryan, Dr D Abraham and Prof K Davis.

Associate:

Dated:    16 August 2022

ANNEXURE A