A challenge by the proprietors of five private hospitals to a new payment system for such hospitals introduced by the VHI board last month has opened in the High Court.
An interlocutory injunction is being sought against the VHI by Clane Hospital, Co Kildare; Galvia Hospital, Renmore, Co Galway; St Joseph's Hospital, Raheny, Dublin; St Joseph's Hospital, Garden Hill, Sligo; and Mount Carmel Hospital, Dublin.
The hospitals claim the new system for reimbursing private hospitals is an abuse by the VHI of its dominant position in the market for health care or medical insurance in the State.
Pending a full hearing they are seeking an order restraining the VHI from seeking to impose the new cash limits and volume restrictions on them without at the same time providing for increases in costs incurred by them.
They also want an order directing the VHI to make payments to hospitals which do not subscribe to the scheme at levels which take account of increases in costs incurred since 1995 and which, at minimum, allow for an increase at the rate of 5.67 per cent of 1995 levels of payments.
The VHI admits that the manner in which it agrees or provides insurance payments to hospitals and the terms on which such payments are to be made may have an impact on the budget, cash-flow and even the survival of a particular hospital. It denies that gives rise to any cause of action.
The VHI denies that, under the new system, certain scheduled treatments are priced below the actual cost of carrying out the procedures. But, without prejudice, it pleads that, if they are, that in itself does not give rise to any cause of action under the Competition Act, 1995, and under EC treaty.
It is also denied that the cash limits proposed to be fixed by the VHI fail to take account of the actual increase in hospital costs between 1996 and 1997, and between 1997 and 1998.
It is admitted by the VHI that if the plaintiffs do not reach agreement with it on the proposed new system of reimbursement, the alternative is for those hospitals to be treated as "partially participating" hospitals and to "balance bill" VHI members.
Mr James Connolly SC, for the hospitals, said private hospitals required reasonable reimbursement to provide proper services and for reinvestment and maintenance of facilities. The VHI was contending that the previous regime of payments to hospitals was flawed. But the present scheme was even more flawed, he said.