EXPLANATORY STATEMENT
Select Legislative Instrument 2011 No. 183
Health Insurance Act 1973
Health Insurance Amendment Regulations 2011 (No. 3)
Subsection 133(1) of the Health Insurance Act 1973 (the Act) provides that the
Governor-General may make regulations, not inconsistent with the Act, prescribing all matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.
The Regulations amend the Health Insurance Regulations 1975 (Principal Regulations) to facilitate the implementation of the ‘changes to fees for fully depreciated diagnostic imaging equipment’ or the Capital Sensitivity 2009-10 Budget Measure.
For the purpose of this measure, the Government announced that from 1 July 2011 diagnostic imaging (DI) services rendered on fully depreciated equipment trigger a 50 per cent reduction in the Medicare rebate. This provision already applies to computed tomography (CT) and angiography services. The measure extends the capital sensitivity provisions to cover all DI equipment including ultrasound, diagnostic radiology, nuclear medicine imaging (excluding PET) and MRI. The purpose of the measure is to encourage diagnostic imaging service providers to upgrade and replace aged equipment as appropriate.
The measure is to be implemented in two phases. The Health Insurance (Diagnostic Imaging Capital Sensitivity) Determination 2011 (the Determination) and the Regulations implement the first phase for the period to 30 June 2012. Following further analysis and consultation, second phase arrangements will be implemented from 1 July 2012.
The majority of the DI services eligible for Medicare benefits are set out in the diagnostic imaging services table (the Table) in the Health Insurance (Diagnostic Imaging Services Table) Regulations 2010 (the DIST Regulations).
The Determination commenced on 1 July 2011, and introduced new services eligible for Medicare benefits for DI services provided on aged equipment, a definition of upgrade, a remote area exemption (RAE) and a grace period to 30 September 2011 for practices intending to but unable to install new equipment by that date.
For each relevant service in the current Table, the Determination introduced a new service with a 50 per cent reduced Medicare Benefit Schedule fee which applies where the equipment used to perform the service is older than:
if the equipment has not been upgraded, the new effective life age; or
if the equipment has been upgraded, the maximum effective life age.
The Determination identified the 50 per cent reduced Schedule fee services as '(NK)' services and the full 100 per cent Schedule fee services as '(K)' services.
The Regulations have been made under subsection 23DZP(1) and subsection 23DZR(2) of the Act.
Subsection 23DZP(1) of the Act outlines the information required in an application for registration of diagnostic imaging premises or a base for mobile diagnostic imaging equipment. The Regulations require applications to include the age of all types of equipment prescribed by regulation 20C, rather than only specific types of equipment as was previously the case. Age of equipment is relevant for identifying whether a Medicare benefit is payable for a service using the equipment.
Subsection 23DZR(2) of the Act defines primary information for the purposes of Division 4 of Part IIB of the Act. Under the Regulations, primary information is prescribed by reference to the types of diagnostic imaging equipment which are, in turn, prescribed by reference to the modality, age and upgrade status of the relevant equipment.
Details of the Regulations are set out in the Attachment.
The Act specifies no conditions that need to be satisfied before the power to make the Regulations may be exercised.
The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.
The Regulations commence on the day after they are registered on the Federal Register of Legislative Instrument.
Consultation
There has been ongoing consultation with stakeholders including industry, manufacturers and the profession since the measure was announced. These consultations have helped shape the implementation arrangements including the new effective life period and the five-year extension period for appropriate upgrades, which differs from the original age restrictions based on the Australian Taxation Office depreciation schedule.
The Department continues to work closely with stakeholders to develop the final form of the measure to apply from 1 July 2012.
Documents incorporated by reference
The following documents are referred to in the Regulations:
Health Insurance Act 1973 (Cth), available from the Federal Register of Legislative Instruments;
Health Insurance Regulations 1975 (Cth), available from the Federal Register of Legislative Instruments;
Health Insurance (Diagnostic Imaging Capital Sensitivity) Determination 2011, available from the Federal Register of Legislative Instruments; and
Health Insurance (Diagnostic Imaging Services Table) Regulations 2010 (Cth), available from the Federal Register of Legislative Instruments.
Authority: Subsection 133(1) of the
Health Insurance Act 1973
ATTACHMENT
DETAILS OF THE HEALTH INSURANCE AMENDMENT REGULATIONS 2011 (No. 3)
Regulation 1 – Name of Regulations
Regulation 1 provides that the title of the Regulations is the Health Insurance Amendment Regulations 2011 (No. 3).
Regulation 2 – Commencement
Regulation 2 provides that the Regulations commence on the day after they are registered.
Regulation 3 – Amendment of Health Insurance Regulations 1975
Regulation 3 provides that Schedule 1 amends the Health Insurance Regulations 1975.
Schedule 1 – Amendments
Item [1] – Subparagraphs 20A(b)(i) and (ii)
This item amends the information required for an application for registration of diagnostic imaging premises or a base for mobile diagnostic imaging equipment to include the type of equipment prescribed in regulation 20C and the age and quantity of the equipment.
Items [2] and [3] – Regulation 20C
These items introduce the following types of diagnostic imaging equipment in relation to non-musculoskeletal ultrasound, musculoskeletal ultrasound, magnetic resonance imaging, mammography and nuclear medicine imaging:
K type (not upgraded) – 10 years old or less;
K type upgraded – more than 10 years old and no more than 15 years old and was upgraded on or before it was 10 years old; and
NK type – is more than 10 years old and has not been upgraded, or was upgraded on or before it was 10 years old and is more than 15 years old.
Item [4] – Paragraphs 20C(k) to (m)
This item introduces the following types of diagnostic imaging equipment in relation to the diagnostic radiology services for fluoroscopic examination, orthopantomography and x-ray:
K type (not upgraded) – 15 years old or less;
K type upgraded – more than 15 years old and no more than 20 years old and was upgraded on or before it was 15 years old; and
NK type – is more than 15 years old and has not been upgraded, or was upgraded on or before it was 15 years old and is more than 20 years old.
The type of diagnostic imaging equipment listed for diagnostic imaging premises or a base for mobile diagnostic imaging equipment is an important concept for determining whether Medicare benefits are payable for certain diagnostic imaging services (refer to section 16D of the Act).
The above types of equipment do not apply to nuclear medicine imaging equipment for positron emission tomography (PET). Paragraph 20C(f) of the Principal Regulations prescribes PET services by reference to the Health Insurance Determination HS/6/01 or Health Insurance Determination HS/3/1997, as in force on 15 May 2003. Item [3] above updates this reference to prescribe PET services by reference to relevant items in the Table.
Items [2], [3] and [4] have the effect of including additional information on type of equipment within the concept of primary information as defined in section 23DZR of the Act. Primary information is required in applications for registration of diagnostic imaging premises and mobile diagnostic imaging equipment under the Act, and is included on the Diagnostic Imaging Register established under the Act (refer to section 23DZP and section 23DZQ of the Act). Registered proprietors are obliged to notify the Minister of changes to primary information within 28 days after the change occurs (refer to section 23DZV of the Act).
Item 5 – After subregulation 20C(1)
This item defines two new terms used in regulation 20C.