Private hospitals are accusing health insurer Medibank of behaving like a schoolyard bully and putting its shareholders ahead of patients.
Australian Private Hospitals Association chief executive Michael Roff says Medibank risks becoming an industry pariah, with hospitals concerned about the health fund's "take it or leave it" approach to contract negotiations.
He says the issue is more widespread than Medibank's highly publicised dispute with private hospital operator Calvary, with the fund apparently taking a new approach to all contract negotiations since the federal government sold it.
The company was now putting shareholders ahead of members, he said.
"Ultimately that could be self-defeating if they end up losing members and, therefore, premium revenue because of the approach that they're taking," he told AAP on Thursday.
"It's clear from the negotiation with Calvary and other negotiations going on that there's the possibility that if patients stay with Medibank, they're not going to be fully covered at their hospital of choice."
Mr Roff says Medibank is trying to improve its profitability by refusing to pay hospitals, or pay a reduced benefit, for a list of 165 so-called "highly preventable adverse events".
He said the list was not based on evidence or clinical standards and Medibank was refusing to let an independent umpire review it.
The list includes infections in cancer patients who are undergoing treatment that leaves them vulnerable to infection, as well as bleeding and haemorrhage in patients with clotting disorders, Mr Roff said.
Medibank has rejected the comments as "poorly informed", saying it had conducted negotiations in a professional and transparent manner, and that its list was based on evidence and discussions with hospital providers.
It said the examples provided by Mr Roff were misleading because Medibank would only adjust payment to the hospital if the complications were caused by the hospital.
In a statement, the health fund said there needed to be a link between healthcare standards and payments "otherwise the healthcare system has limited incentive to focus on reducing waste and addressing improvements".
"Medibank doesn't want to see our members - or any patients for that matter - come to harm while receiving health care, nor do our members want to go on being asked to foot the bill through higher premiums for avoidable mistakes or waste in the hospital setting," it said.
The Australian Commission on Safety and Quality in Health Care, the government agency responsible for monitoring safety and quality, says Medibank has not sought its advice on the list.
"We haven't seen the list and we haven't been asked to advise on the list to date," the commission's clinical director, Robert Herkes, told AAP.
Dr Herkes said the commission is working on its own list of preventable events to improve patient safety, which is due to be completed within the next 12 months.
He said Medibank's list was "premature" and testing needed to be done to ensure the measures would actually improve patient safety.
"I'd love to see the list because I'd be interested to see how it compares with our list," he said.
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