Home' News Bulletin : ADA News Bulletin June 2016 Contents REGULAR | ADVOCACY
The ADA from time-to-time receives queries about arrangements
proposed by private health insurers. Recently, we received a letter
written by Bupa to individual dentists, as well as to owners of
dental practices about changes proposed to preferred provider
arrangements from 1 June 2016.
The Letter states that "...From 1 June 2016, all recognised
dental practitioners within your practice must apply to be part
of the Members First dental network...[and]...to continue your
participation in the Bupa Members First network, all general dental
practitioners at your practice must complete and return a Rules of
Participation Agreement ..."
Restrictions such as those set out above are not unusual in
Australian industry. However, as a service to our members, we
advise below some of the implications for you from a competition
Obviously, it is ultimately up to you to decide how you wish to
proceed. It is also prudent for you to get your own legal advice
about the implications of the arrangements or agreements that
you are entering.
As you are probably aware the Competition and Consumer Act
(CCA) affects all persons that carry on business in Australia.
The CCA prohibits certain business conduct. Some conduct is
prohibited automatically while other conduct is only prohibited
if it has the purpose or the likely effect of substantially lessening
competition in Australia.
Third line forcing
Third line forcing is an example of automatically prohibited conduct.
Third line forcing occurs where a supplier of goods or services offers
to supply such goods or services (or to supply them at a particular
price) on the condition that the 'customer' also acquires a second
good or service from another person.
Practice Owners (whether they are dentists or not)
In our view, the arrangements that Bupa is requiring owners of
dental practices to adopt by 1 June 2016 are at high risk of resulting
in practice owners engaging in third line forcing.
Even though the strategy is that of Bupa and the strategy may, in
some instances, arguably result in benefits for practices, dentists
and for patients, the arrangements are likely to amount to third
line forcing which is automatically prohibited by the CCA.
The conduct amounts to third line forcing as, in effect, it results
in a practice owner that wishes the practice to become/remain
Bupa Members First dental network
Competition issues to consider
a part of the Bupa Members First network only offering dentists
the opportunity to work at the practice and providing dentists
the services associated with the practice (rooms, equipment,
consumables, dental hygienists, administration and billing
services), on the condition that the dentist him/herself enter into
an agreement with Bupa (i.e. and acquire services from Bupa,
being all of the advantages of being a Members First dentist).
Please note that there are ways that owners of dental practices may
structure themselves and/or engage with the competition regulator,
the ACCC, to ensure that you do not breach this prohibition.
You should get your own legal advice and/or engage with Bupa
about how best to limit this risk.
The position of individual dentists, as well as the characterisation
of the conduct, may well be affected by the 'status' of arrangements
with individual dentists.
If the individual dentist is an employee of the practice owner, it
may be that the requirement, as part of an employment contract,
may not amount to third line forcing (as there are exceptions for
If however, the individual dentist is a contractor, particularly if the
dentist has incorporated as part of the supply of his/her services,
the requirement is likely to amount to a third line force.
Further, even though individual dentists may be 'happy' to become
part of the Members First dental network (some may already be a
part of the network) and are, themselves, not engaging in the 'force',
they are also at risk of being 'knowingly concerned' in the conduct --
and because it is an automatic offence, are also at risk of breaching
As stated above, you should get your own legal advice about your
position. We expect that Bupa has or is obtaining legal advice about
Chief Executive Officer
Australian Dental Association
"...YOU SHOULD GET YOUR OWN LEGAL
ADVICE ABOUT YOUR POSITION."
ADA NEWS BULLETIN | JUNE 2016 | 5
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