Government bill to control specialist costs, outlaw ‘product phoenixing’

The Albanese government has introduced landmark legislation aimed at providing Australians with greater transparency and value when seeking specialist medical advice and treatment.

The new Bill seeks to overhaul the previously ineffective Medical Costs Finder tool and outlaw deceptive practices by private health insurers, such as product phoenixing, addressing long-standing concerns about unpredictable out-of-pocket expenses.

Minister for Health and Aged Care, Mark Butler, announced the introduction of the Health Legislation Amendment (Improving Choice and Transparency for Private Health Consumers) Bill 2026, noting the urgent need for reform.

“Specialists and private health funds have been given the opportunity to be upfront about patient costs and out of pocket expenses but frankly, have failed to do so,” he said.
 
“We know an increasing number of Australians are not taking up referrals from their GP to see a specialist due to concern about cost.”

A flawed system

The Medical Costs Finder website, established by the previous government with a $24 million investment, was intended to display the cost of common medical services.

However, its impact was severely limited by its voluntary participation model. Minister Butler revealed the extent of its failure, stating that by the end of 2022, only six individual doctors out of approximately 6,300 eligible specialists had chosen to display their fee information.

Even three years later, this number had only marginally increased to around 88 individual doctors.

The new legislation will rectify this by allowing the government to publish details about what individual specialists charge for particular medical services.

This will be achieved by utilising existing Medicare, hospital, and insurer billing data already collected by the government. This crucial change will enable people to compare costs and make informed decisions about their healthcare.

Australian Medical Association (AMA) president Dr Danielle McMullen welcomed the move.

“The AMA has pushed hard for Medicare rebates and insurer benefits to be included on the Medical Costs Finder, so that patients get the full picture of why they may face an out-of-pocket cost,” she said.

Dr McMullen also acknowledged the challenges with the previous iteration, noting that private health insurers had been “extremely reluctant to upload their information, which also created a significant disincentive for doctors to upload their own billing data.”

Catholic Health Australia (CHA) also praised the reform.

Dr Katharine Bassett, for Catholic Health Australia director of health policy noted that CHA has long advocated for changes to make the Medical Costs Finder genuinely useful.

“This reform is critical as out-of-pocket costs for specialist care are rising and becoming increasingly unpredictable for patients,” she said.

Ending “product phoenixing”

Beyond specialist fees, the legislation will also outlaw the practice known as “product phoenixing” by private health insurers. This deceptive tactic involves insurers closing a product and then re-opening a similar one at a higher price, or reducing the value of an existing product.

Minister Butler had previously warned insurers to cease this practice.

“I also warned insurers that product phoenixing had to stop and yet insurers continued to do so,” he said.

The new Bill legislates wider scrutiny of premiums, requiring insurers to seek Ministerial approval for premiums for new products and for certain changes that reduce the cover or value of existing products. This aims to ensure consumers can be more confident in the value of their private health insurance.

“The AMA has consistently called for this practice to be banned and welcomes the government’s action to put an end to it.” Dr McMullen said.

She added that the Minister himself had described phoenixing as “underhanded” and “sneaky,” and banning this practice would be an important win for consumers.

Specialist fee crisis

Private Healthcare Australia (PHA) identified the stronger transparency laws as a critical step in tackling Australia’s growing specialist fee crisis.

A recent PHA report, Restoring affordable access to specialist care in Australia, revealed an urgent affordability and access problem. Its findings included:

• Some specialists, such as psychiatrists and surgeons, charging $500–$1,000 upfront for a first appointment
• The median in-hospital specialist gap fee rising 22 per cent since 2022
• One in two patients not knowing their fee before attending an appointment
• 38 per cent of patients receiving an unexpected bill, with nearly one in three reporting illegal “booking” or “admin” fees
• Nearly 30 per cent of Australians delaying or cancelling specialist care due to cost pressures.

“Greater visibility of specialist fees will help patients compare options, avoid bill shock and make informed choices about their healthcare,” PHA chief Dr Rachel David said.

She added that health funds are ready to contribute more data to the upgraded website to help consumers understand typical charges and expected out-of-pocket costs.

“This legislation is an important first step in restoring affordable access to specialist care and ensuring the private health system remains accessible and sustainable to take pressure off the public health system.”

While welcoming the reforms, CHA’s Dr Bassett noted that transparency of fees is just one factor affecting access to specialist care, calling for a comprehensive review of access across both public and private settings.

“The goal must be a health system where people can access timely specialist care based on need, not on their capacity to absorb unexpected and growing out-of-pocket costs, their postcode, or other structural barriers,” she said.