A breakdown in negotiations between the Calvary Health Care group and an alliance of dozens of health insurers is likely to leave thousands of patients out of pocket.
Two million Australians are covered by the 25 health insurers involved in the stoush, who operate under the banner of the Australian Health Service Alliance (AHSA).
Calvary runs nine hospitals in the ACT, Tasmania, South Australia and New South Wales.
Calvary has warned health insurers have historically paid low rates, which threatened the sustainability of its hospitals.
But the Alliance said Calvary wanted to charge health insurers too much.
The end of the agreement will mean patients with affected private health insurers will be limited in what expenses they can claim for their hospital stay.
Insurers will still have to cover a percentage of patients’ fees.
Calvary has estimated patients will be charged an average out-of-pocket amount of $500, and more for complex treatment.
“They’ll still be able to access the hospital, but they may be required to pay an additional gap to attend the Calvary hospitals,” Andrew Sando from AHSA said.
The Alliance has written to 800 doctors about the situation, and suggested they send patients to other hospitals rather than Calvary sites.
In a statement, Calvary CEO Mark Doran said it had negotiated in good faith with AHSA since July.
“The quality of care to our patients is central to this decision, which we have not taken lightly,” Mr Doran said.
“All we are seeking is a fair go, a level playing field with what health funds are paying other private hospital operators on a national average.”