Health insurer owes hospitals '$26m'

By ELEANOR BLACK

Private hospitals say they are $26 million out of pocket because of Southern Cross Healthcare's backlog of unprocessed claims.

If the country's largest healthcare provider did not address the problem soon patients could be forced to meet the shortfall, said Lesley Clarke, executive director of the Private Hospitals Association.

Southern Cross was seven weeks behind in meeting claims and owed patients and healthcare providers around $40 million. Thirty private hospitals may have to seek payments from patients rather than wait for the insurer to send cheques.

Southern Cross spokesman Michael Ashby said outstanding claims totalled only $25 million and the turnaround time was just four to six weeks. Normally, outstanding claims totalled $12 million to $15 million and were settled within seven to 21 days.

He would not discuss the issue but released a statement saying extra staff had worked over the holidays and the waiting period was gradually falling.

"We still expect the turnaround time on payout for claims to be back to normal by the end of January."

Ms Clarke said the association had talked to the insurer about the backlog but was disappointed by the response.

"They're not taking us seriously."

If the situation did not improve, private hospitals might start asking patients to settle their accounts when they were discharged. This would put a financial burden on patients while they waited for their insurer to pay out.

"Hospitals will do what they can to avoid it," said Ms Clarke. "We don't want to put people off taking out private health insurance."

Southern Cross blamed the delays on a "complex changeover" to a new computer system at the end of last year. It took three months to transfer the details of 800,000 members. The company apologised for the delays in an advertisement that assured members all valid claims would be paid.