Medibank chief executive George Savvides floated the idea of privately insured patients receiving priority treatment in public hospital emergency departments at a function with doctors in March.
Speaking at a dinner in Parliament House on Wednesday night, Australian Medical Association president Brian Owler said "the CEO of a large private health insurer" who was invited to speak at an AMA function "tried to tell us that they wanted patients with private insurance in a public hospital emergency department to receive priority."
"His question was if your son breaks his arm and goes to the emergency department, and you have private health insurance, why shouldn't little Johnny get priority?"
Associate Professor Owler said the AMA members in attendance strongly rejected the idea.
"Our ED doctors are not going to make a more deserving patient wait because little Johnny's parents have private insurance," he said.
Associate Professor Owler would not name the insurer or the executive. But Fairfax Media understands he was referring to a dinner attended by AMA leadership in Canberra in March at which Mr Savvides was the guest speaker.
A spokeswoman for Medibank confirmed Mr Savvides attended a dinner with the AMA Council in March at which a range of health care issues were discussed.
"Mr Savvides has long been an advocate for more emergency care in private hospitals and for private health insurers to be able to provide more cover for their members in this space. But he is not in favour of private health insurance patients having priority over others in emergency departments and nor is this Medibank's position."
"We expect people in most need of emergency treatment, regardless of their personal circumstances, should be given priority," the spokeswoman said.
Health Minister Peter Dutton said the triage of patients in emergency departments was based on clinical need as determined by health professionals.
"Under no circumstances should triage of patients in emergency departments be according to health insurance status. Any suggestion to the contrary is ridiculous," he said.
Consumers Health Forum chief executive Adam Stankevicius said privately insured patients already received preferential treatment in some public hospitals.
"We know for example that in some public hospitals, people who declare their private health insurance status are getting the equivalent of those kind of gift packs you get in business and first class on planes... we're concerned that that's the first step towards a two-class public hospital system," he said.
The Abbott government has started preparations for the sale of Medibank, which is the nation's largest health fund, with about 30 per cent of the market. But the government has not made a final decision to proceed with a float, which analysts speculate could occur as soon as October, and raise $4 billion.
Medibank has drawn controversy for a Queensland trial in which its members receive guaranteed same day appointments and free after-hours home visits at 26 general practices run by the Independent Practitioner Network. Medibank plans to roll the scheme out nationally by November.
The insurer pays the GP clinics an administration fee but the AMA says this breaches the spirit of regulations which prohibit insurers paying for GP services. Consumer advocates have also been critical of the trial, arguing it will exacerbate health inequality by allowing privately insured patients to receive better care than those who can't afford private cover.