EXPLANATORY STATEMENT
Issued by the Authority of the Minister for Health and Ageing
Health Insurance Act 1973
Health Insurance (Diagnostic Imaging Capital Sensitivity) Amendment Determination 2012
Subsection 3C(1) of the Health Insurance Act 1973 (the Act) provides, in part, that the Minister may determine in writing that a health service not listed in the diagnostic imaging services table (the Table) shall, in specified circumstances and for specified statutory provisions, be treated as if it were so listed. The Table is set out in the Health Insurance (Diagnostic Imaging Services Table) Regulations (the DIST Regulations) which are remade each year.
Purpose
This Determination amends the Health Insurance (Diagnostic Imaging Capital Sensitivity) Determination 2011 (the Principal Determination) to give effect to the second phase of the Capital Sensitivity 2009-10 Budget Measure. The capital sensitivity arrangements prescribed in this Determination are not significantly different from those set out in the Principal Determination. This Determination revokes some of the transitional provisions in the Principal Determination that are now obsolete and sets out the eligibility criteria for practices wishing to seek an exemption for inner regional areas.
Background
The Principal Determination introduced new services eligible for Medicare benefits to align with the ‘Changes to fees for fully depreciated diagnostic imaging equipment’ Capital Sensitivity 2009-10 Budget measure. This measure is about improving the quality of diagnostic imaging services by encouraging diagnostic imaging service providers to upgrade and replace as appropriate, aged equipment. For each relevant service in the current DIST Regulations, the Principal 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.
Details of the Determination are set out in the Attachment.
The Determination commences on 1 July 2012.
The Determination is a legislative instrument for the purposes of the
Legislative Instruments Act 2003.
Consultation
Since the measure was announced, consultation with stakeholders has been ongoing. These consultations helped to shape the initial implementation arrangements prescribed by the Principal Determination for the period from 1 July 2011 to 30 June 2012. This included the new effective life period and the five-year extension period for appropriate upgrades, which differed from the original age restrictions based on the Australian Taxation Office depreciation schedule.
The phased implementation arrangements have helped to ensure consideration of the issues associated with the age of equipment, what constitutes an upgrade across the different modalities and remote area exemptions. This further analysis and consultation since 30 June 2011 have determined the ongoing arrangements which are implemented through this Determination.
ATTACHMENT
DETAILS OF THE HEALTH INSURANCE (DIAGNOSTIC IMAGING CAPITAL SENSITIVITY) AMENDMENT DETERMINATION 2012
Section 1 – Name of Determination
Section 1 provides that the title of the Determination is the Health Insurance (Diagnostic Imaging Capital Sensitivity) Amendment Determination 2012 (the Determination).
Section 2 – Commencement
Section 2 provides that the Determination commences on 1 July 2012.
Section 3 – Amendment of Health Insurance (Diagnostic Imaging Capital Sensitivity) Determination 2011
Section 3 provides that Schedule 1 of the Determination amends the Health Insurance (Diagnostic Imaging Capital Sensitivity) Determination 2011 (the Principal Determination).
Schedule 1
Item 1
This item omits the definition of DIST Regulations. This is a technical amendment to ensure that the Principal Determination refers to the diagnostic imaging services table, which is defined in
subsection 3(1) of the Health Insurance Act 1973, consistently throughout the Principal Determination.
Item 2
This is a technical amendment as a consequence of item 1 and replaces references to ‘DIST Regulations’ with ‘diagnostic imaging services table’, wherever that first term is used.
Item 3
This item is a technical amendment that ensures that the general medical services table, which is defined in subsection 3(1) of the Health Insurance Act 1973, is consistently referred to throughout the Principal Determination.
Item 4
This item substitutes a new section 6 as a consequence of certain subsections of the Principal Determination now being obsolete (subsections 6(2), 6(3) and 6(4) prior to the amendments in this Determination commencing).
Schedule 1 to the Principal Determination provides for (NK) items. Subsection 6(1) provides that an (NK) item applies to a service which is performed using:
diagnostic imaging equipment with an age that exceeds the new effective life age specified for that type of equipment which has not been upgraded; or
upgraded diagnostic imaging equipment with an age that exceeds the maximum extended life age specified for that type of equipment.
Subsections 6(2) to 6(8) specify circumstances in which (NK) items do not apply.
Subsections 6(2) and 6(3) provide an exemption from the application of (NK) items where the relevant diagnostic imaging equipment is ordinarily located at diagnostic imaging premises or a base for mobile diagnostic imaging equipment in any of Outer Regional Australia, Remote Australia or Very Remote Australia (as defined in the Australian Standard Geographical Classification).
Subsection 6(4) provides that (NK) items do not apply where the Secretary has granted an exemption in relation to inner regional areas under subsection 6(5). That subsection also provides that the (NK) items do not apply where the proprietor has been notified by the Department of the receipt of a valid application for an exemption in relation to inner regional areas and a decision has not been made by the Secretary. The subsection also provides that the (NK) items do not apply during any reconsideration of refusal to grant an exemption (see section 8 of Principal Determination and item 5 of this Determination).
Subsection 6(5) provides that the Secretary may grant an exemption in respect of diagnostic imaging equipment where the Secretary is satisfied that the diagnostic imaging equipment is operated on a rare and sporadic basis and provides crucial patient access to diagnostic imaging services.
Subsection 6(6) provides that the Secretary is to make a decision within 28 days of the day on which the relevant proprietor was given notice of a valid application.
Subsections 6(7) and 6(8) provide that only practices located at diagnostic imaging premises or a base for mobile diagnostic imaging equipment in an area classified as Inner Regional Australia (Remoteness Area 1) and RRMA 4 or 5 (small rural centre or other rural area) and whose diagnostic imaging equipment exceeds the maximum extended life age by less than three years are eligible to apply for an inner regional exemption. Applications by practices must be made in writing. The Department will notify proprietors of the receipt of a valid application. Proprietors can identify whether they fall under RRMA 4 or 5 at the Department's DoctorConnect website: www.doctorconnect.gov.au
Item 5
This item substitutes a new section 8 in relation to reconsideration decisions. This is consequential amendment as a result of amendments to section 6 made by item 4 of this Determination.