EXPLANATORY STATEMENT
Issued by the Authority of the Minister for Health and Ageing
Health Insurance Act 1973
Health Insurance (Extended Medicare Safety Net) Amendment Determination 2010 (No.2)
Section 10B of the Health Insurance Act 1973 (“the Act”) provides that the Minister for Health and Ageing may, by legislative instrument, determine to which items of the Health Insurance (General Medical Services Table) Regulations, the Health Insurance (Pathology Services Table) Regulations or the Health Insurance (Diagnostic Imaging Services Table) Regulations subsections 10ACA(7A) and 10ADA(8A) of the Act apply and the maximum increase in Medicare benefit payable for those items under the Extended Medicare Safety Net (‘EMSN’). The increase in the Medicare benefit payable under the EMSN is commonly referred to as the ‘EMSN benefit’.
Subsections 10ACA(7A) and 10ADA(8A) of the Act provide that where an item is listed in this Determination, the EMSN benefit must not exceed the amount determined in relation to that item (“the EMSN benefit cap”).
This Determination amends the Health Insurance (Extended Medicare Safety Net) Determination 2009 by indexing the existing EMSN benefit caps by Consumer Price Index (CPI), to commence on 1 January 2011.
Background
The EMSN provides an increased Medicare rebate for Medicare eligible families and singles who incur out-of-pocket costs for Medicare eligible out-of-hospital services and is provided for in sections 10ACA and 10ADA of the Act. Out-of-hospital services include general practitioner and specialist attendances, as well as many pathology and diagnostic imaging services. The out-of-pocket cost is the difference between the fee charged by the doctor and the standard Medicare rebate (including any benefit received through the original Medicare safety net) that the patient receives from Medicare. Once the relevant annual threshold of out-of-pocket costs has been reached, Medicare will pay 80% of any future out-of-pocket costs for Medicare eligible out-of-hospital services for the remainder of the calendar year. However, where an item has an EMSN benefit cap, there is a maximum benefit payable for that item. For the 2010 calendar year, the annual EMSN threshold for concession cardholders and people who receive Family Tax Benefits (Part A) is $562.90. For all other singles and families the annual threshold is $1,126.00. These amounts are indexed by CPI on 1 January each year.
The EMSN benefit cap is the maximum amount of benefit payable under the EMSN, regardless of the fee that is charged by the practitioner. The EMSN benefit cap is payable in addition to the standard Medicare rebate (including any benefits received through the original safety net).
In calculating a patient’s Medicare benefit where an EMSN benefit cap applies, the EMSN benefit is calculated in the same way as if the patient were claiming an uncapped item, that is, 80% of their out-of-pocket costs for that claim once they have reached the applicable EMSN threshold. However, when the calculated EMSN benefit is greater than the amount of the EMSN benefit cap for that item, the EMSN benefit is limited to the EMSN benefit cap. When the EMSN benefit calculated is less than the EMSN benefit cap, the person will receive the EMSN benefit that is equal to the calculation.
On 1 January 2010, under the 2009-10 Budget measure ‘The Sustainable Safety Net’ and following Parliamentary approval of the Health Insurance (Extended Medicare Safety Net) Determination 2009, an EMSN benefit cap was placed on 71 items, including: all obstetrics and pregnancy related ultrasound, Assisted Reproductive Technology (ART) including In-Vitro Fertilisation (IVF), hair transplantation for alopecia, one type of cataract operation and one type of varicose vein treatment. The Budget measure also provides for the indexation of EMSN benefit caps by CPI on 1 January of each calendar year.
Effect of the Health Insurance (Extended Medicare Safety Net) Amendment Determination 2010 (No.2)
This Determination amends the Health Insurance (Extended Medicare Safety Net) Determination 2009 to provide for the indexation of existing EMSN benefit caps to June quarter CPI. The indexed EMSN benefit cap amounts will become effective as of 1 January 2011.
Indexation of the EMSN benefit caps provides for a greater Medicare rebate to be paid to patients who are eligible for the EMSN benefit cap. For example, if a patient was billed for item 16590, planning and management of a pregnancy, and is eligible to receive the EMSN benefit cap, in 2010 the maximum amount of benefit paid through the EMSN is $203.00. After indexation, the maximum amount of benefit that can be paid through the EMSN in 2011 for the same item will be $209.30.
This Determination will not have an impact on small business. The EMSN benefit is a patient benefit. Practitioners will not be required to complete any additional activities to comply with the change. The increased level of the EMSN benefit cap will be automatically applied by Medicare Australia at the time that a patient’s claim is submitted.
Details of the Determination can be found in the Attachment.
Financial Impact Statement
There is no additional financial impact for the introduction of this Determination, as the indexation of the EMSN benefit cap amounts was costed in the 2009-10 Federal Budget.
Commencement
The provisions set out in the Determination will become effective from 1 January 2011.
Consultation
Indexation of the EMSN benefit caps was announced in the 2009-10 Budget measure and included in the Departments submission to the Senate Inquiry into the Health Insurance Amendment (Extended Medicare Safety Net) Bill 2009. Stakeholders are aware that the EMSN benefit caps will be indexed each year.
ATTACHMENT
Details of the Health Insurance (Extended Medicare Safety Net) Amendment Determination 2010 (No. 2)
1. Name of Determination
Section 1 provides that the title of the Determination is the Health Insurance (Extended Medicare Safety Net) Amendment Determination 2010 (No.2).
2. Commencement
Section 2 provides that the Determination will commence on 1 January 2011.
3. Amendment of the Health Insurance (Extended Medicare Safety Net) Determination 2009
Section 3 provides that Schedule 1 of the Determination amends the existing Health Insurance (Extended Medicare Safety Net) Determination 2009.
Schedule 1 – Amendments
Schedule 1 provides for the omission of the cap amount in column 2 of items listed under Subsection 4(1) of the Health Insurance (Extended Medicare Safety Net) Determination 2009 with the substitution of the indexed cap amounts as determined in Schedule 1 of the Determination.
Schedule 1 provides for EMSN benefit caps indexed to June quarter 2010 CPI (3.1%) for items in the Health Insurance (General Medical Services Table) Regulations relating to obstetric services (items 16400-16636), for ART services (items 13200-13251), the item for cataract surgery (items 42702), the item for hair transplantation (45560) and the item for one type of varicose vein surgery (item 32500). Schedule 1 also provides for a similar indexation of EMSN benefit caps for items in the Health Insurance (Diagnostic Imaging Services Table) Regulations relating to obstetric and gynaecological ultrasound services (items 55700-55774).