Scalpel cuts two ways on medical insurance: Company asks subscribers to be cute about cover and avoid unfair fees

All subscribers to Western Provident Association, the third largest medical fees insurer, have received a letter advising them to be coy when asked by hospitals or doctors whether they are covered by insurance.

This is because WPA has increasing evidence that patients covered by insurance are being charged more.

Julian Stainton, the managing director of WPA, said: 'It should not be relevant whether you are insured or not. We advise people when asked to say: 'I am simply a private patient.' We are not asking people to tell lies.

'If our subscribers want to pay on the spot in advance, we are happy to reimburse them immediately - and if we do not do so within 10 days, we pay them interest.'

When patients take the initiative on questioning prices they can get results. A pensioner from Kent recently went into Somerfield Hospital in Maidstone for a prostate operation. He recalled: 'Before I was admitted I was asked by a girl at the hospital whether I was insured with BUPA, and I said I was not. I was then asked if I was with Private Patients Plan. Again I replied I was not.

'She then said, 'Do you want to pay?' I replied, 'I have to pay, don't I?' '

The pensioner was offered a fixed-price package of pounds 3,225, which included the fees for the hospital, surgeon and anaesthetist. In accordance with the terms of the package, he paid in full before admission - but he did ask for an itemised bill.

He was happy with the treatment and service he received in the hospital.

Soon after he was discharged he received a bill for the anaesthetist's fee. He immediately telephoned the hospital accounts department, which confirmed the bill was an error and was covered under the fixed- package price.

However, it subsequently came to the hospital's notice that the pensioner was insured. His ex-employer, a retail chain, has a scheme which reimburses the medical bills for some employees and ex-employees. The firm insures the risk with Lloyd's and medical fees insurers are not involved.

Sandy Macdonald-Smith, a director of Executive Health Care, the administrator of the scheme, said: 'As soon as the hospital became aware that he had cover through his former company, it chose to break the contract and charge on a different basis altogether.

'The hospital, surgeon's and anaesthetist's bills now came to pounds 3,707 - nearly pounds 500 more.'

The hospital confirmed that the pensioner was admitted as a fixed-price patient, that 'we subsequently altered the basis of the agreement, and that it should not have happened'. It has since refunded the balance of its charges over and above the fixed price.

Paul Murphy, the managing director of Great Northern Hospitals, which owns the Somerfield, said: 'We have an absolutely simple pricing structure and a widely published price list, and anybody, including insurance companies, can have fixed-price surgery - but they have to pay in advance.'

The anaesthetist's revised fee was, in fact, pounds 25 less than the earlier fixed fee.

Dr Macdonald-Smith said: 'The surgeon's new charge was pounds 232 more than his fee under the fixed-price package - and he is sticking to this on the basis that he says it is his fee for the work done.'

Having one price for those who are insured and one for the patient who pays discriminates doubly against the insured, because they will inevitably have to bear the increased costs in higher premiums.

(Photograph omitted)